Everyone’s talking about KiwiSaver. But where does that leave 600,000 self-employed workers?

Monday, 6 July 2026

The National Party's proposed 4% compulsory contribution by 2028 threatens cashflow for NZ's self-employed.

Australia exempts sole traders, leaving many with 50% less retirement savings than employees.

With 100,000 Kiwi business owners exiting soon, relying purely on business sales is risky; early planning is vital.

Retirement questions Answered: from time to time, we will pick a question sent in by a reader and offer a response from personal finance writer Gill South. You can submit questions below.

The proposal by the National Party to make KiwiSaver mandatory if it returns to government, sent a chill down the spine of many self-employed workers, especially those of us in the 50s and 60s demographic who are saving frantically for retirement and not earning as much as we were.

We’ve never had the luxury of an employer matching our KiwiSaver contributions and we tend to drop our contributions during slow times and maybe raise them in better times. (in theory)

For small business owners, it’s not uncommon for them to be counting on the sale of their business to help fund their retirement but this can be risky if their business is in a so-called dying sector, or has customers who want the business owner and only them.

One reader, Nick* asked us: “As a business owner and sole trader, I'm reading a lot about KiwiSaver, but everything seems to leave me out. Now, with the talk of mandatory KiwiSaver, I'm worried about how this might affect my cashflow. What does this mean for me? How could this affect me? And how much should I realistically be putting away? Is there any way I can prepare for what's coming?”

To answer this question, I was interested in how small business owners and the self-employed in Aussie have been coping with mandatory superannuation contributions for eons so I went to business and accounting advisory business, MYOB which operates in both NZ and Australia.

Dale Dixon, practice and partner advisory general manager at MYOB, the business management solutions provider, is based in Melbourne but works across both the NZ and Australian businesses.

The Australian says changes to the retirement system whether it’s compulsory KiwiSaver, increasing the age of superannuation eligibility, means-testing and so on, are all being talked about in the national NZ election.

He gets it. For many local small businesses – there are 600,000 SMEs in NZ including 450,000 solo traders – this political debate will likely bring into focus how much business owners can afford to set aside for retirement especially if KiwiSaver contributions become mandatory.

Frankly, just having enough to pay themselves is a big pressure, sympathises Dixon.

Cashflow is a big issue for small businesses, he says, with nearly a quarter of sole trader respondents in the recent MYOB Business Monitor survey saying cashflow was the biggest single factor holding them back from growing their business.

Many are already reeling from overheads increasing – things like rent and power, up by over $1000 a month, he says.

In Aussie, where the superannuation system has been going since 1992, the Australian government doesn’t make sole traders contribute to a superannuation fund as they aren’t classed as employees, Dixon tells me.

By contrast what the National Party policy is proposing on mandatory KiwiSaver contributions is for all workers to participate. Under its current proposal the self-employed would need to make compulsory contributions at the same level as employee contributions starting at 4% of income from July 1, 2028. So that’s quite a difference from Aussie.

Given the choice not to pay into super across the ditch, many small businesses and sole traders there miss regular super contributions, Dixon says. Which means they have significantly reduced retirement savings over time, in fact around 50% lower than their employed counterparts of the same age.

According to MYOB’s research, 27% of the Aussie small business owners surveyed said they never pay into super, and 17% only sometimes. Of course, they don’t have the safety net of universal super over there either, so these Aussie battler sole traders truly are brave people.

Let’s face it, small business owners and the self-employed on both sides of the Tasman are risk takers.

A 2024 Te Ara Ahunga Ora Retirement Commission report done with sole trader accounting fintech Hnry, Improving the retirement savings of the self-employed has said that KiwiSaver is not well set up for the self-employed and I’m inclined to agree.

Dixon stresses that business owners should consider making themselves a priority, which they so often are not, paying themselves last let alone putting money into KiwiSaver.

And if your business is part of your retirement plan, then preparing for retirement is something you should be doing well ahead of time, Dixon advises.

I’ve always been told business owners should start prepping their business for sale five years’ out. I run this past Dixon to see if that’s still the advice.

“There’s no one-size fits all model that suits retirement planning for SMEs. Talking early about your goals and requirements to a trusted advisor is a good idea. It may help identify a range of potential retirement options, such as putting a succession plan in place for your exit,” he says.

He tells me over a quarter of Kiwi sole traders are planning to sell or retire from their businesses in the next two years – that’s about 100,000 of us. That is quite a rush to the exit, folks. Is everyone going to find a buyer for their business? Unlikely.

Dixon suggests that Nick talk to his accountant or financial adviser about how he might manage his retirement income.

Treat the national conversation about mandatory KiwiSaver contributions as a prompt to think about your superannuation plans, says the MYOB GM.

Or I guess with an election coming up, if you don’t like it the prospect of mandatory KiwiSaver contributions, you could always vote with your feet, Nick. Am I sounding like the feisty columnist Verity Johnson now?

Gill South is a freelance business writer who has authored a book on personal finance and written for many major publications in New Zealand.

*Disclaimer: The information in this article is of a general nature and is not intended to be personalised financial advice. The name of the individual in this story has been changed to protect their privacy.