National pledges to make KiwiSaver compulsory, increase combined contribution rates to 12%

Sunday, 21 June 2026

National has pledged to overhaul KiwiSaver, making it compulsory and increasing the combined contribution to 12%.

National Leader Christopher Luxon made the announcement at the party’s annual conference in Lower Hutt

National also pledged to make government KiwiSaver contributions for all parents on paid parental leave if re-elected, aiming to reduce the long-term retirement savings hit often faced by mothers.

National will overhaul KiwiSaver if re-elected making it mandatory for all workers and lift the combined contribution rates to 12% .

National Leader Christopher Luxon announced the proposed reforms at the party’s National Conference in Lower Hutt.

'National will back New Zealanders to get ahead, build a bigger nest egg, and retire with greater financial security,' Luxon said.

'In a more uncertain world, New Zealand needs higher savings and greater financial resilience. Compulsory KiwiSaver will help deliver both.'

Under the newly unveiled policy, KiwiSaver will become compulsory for all workers starting 1 July 2028. Contribution rates will undergo a phased escalation, culminating in 2032 with a mandatory 6% contribution from employees and a matching 6% from employers.

Tightening the Reins on Pauses

The shift to a compulsory model means the flexibility currently enjoyed by savers will drastically tighten.

Under the new rules, workers will no longer be able to freely take a 'savings suspension' to boost their immediate take-home pay. Instead, contributions can only be paused if an applicant meets the strict criteria currently used for early financial hardship withdrawals.

Luxon framed the savings targets as a shield against global economic volatility and inflation pressures, while drawing a sharp contrast with opposing tax philosophies.

'New Zealanders who do the right thing by working hard, saving up and investing deserve a Government that backs them – not to be punished with more taxes that hit their investments,' Luxon said.

People who work past the age of 65 can will also qualify for employee contributions under the changes. From mid-2027, employers will legally be required to maintain KiwiSaver contributions for employees who choose to work past the age of 65.

Another proposed change is from 1 July 2027, every child born in New Zealand will be automatically enrolled in KiwiSaver at birth, kick-started by a $1,500 government deposit.

“We want to make sure that we are setting every Kiwi kid up, irrespective of their circumstances, from day one, that actually they are going to hit retirement with some wealth and some retirement nesting, and of course, that gives them more choices about how they get to live their life as well,” Luxon said.

That leg of the policy gained a rebuke from Winston Peters - as New Zealand First had already announced it would make KiwiSaver compulsory at birth, with a kickstart of $1000. It was announced alongside their pledge to buy back BNZ - which Luxon took aim at in his speech today saying it was “not serious to spend $30 billion buying a bank, when we already own one.”

““It must be slightly embarrassing to first criticise NZFirst then have to copy our policies,” Peters told Stuff.

Labour leader Chris Hipkins wouldn’t criticise or promise to match the policy, instead saying National was “ all over the show” because up until now they had been focussed on cutting KiwiSaver.

“The National Party are all over the show on this. Remembering last time we had a compulsory retirement savings scheme in New Zealand, it was a National Party that abolished it. They had dancing Cossacks because they called it communism,” he said.

Paid parental leave

All new parents on paid parental leave will be paid a KiwiSaver contribution by the government if National is re-elected, in a bid to address the motherhood ‘penalty’.

Speaking exclusively to Stuff ahead of the announcement of the policy later on Sunday, National Finance Minister Nicola Willis said women are bearing the brunt of the financial cost of having children and it’s having too much of an impact on their retirement savings.

“Right now, most women, when they go on paid parental leave, aren't making contributions to their KiwiSaver, which means that they miss out on a matching contribution from their employer.

“While those amounts are small at the time, it has a really negative compounding effect over time in terms of the value of their KiwiSaver, when they retire,” she said.

“When you make that choice as a mother, we don't want that to come with a long-term penalty to your retirement savings. And so we're fixing up what has been an unfairness in the scheme.”

In 2023, the then-Labour government introduced a policy to pay the employer’s KiwiSaver contribution to paid parental leave recipients if they continued contributions.

But National said while the policy was well-intentioned, it did not have the desired effect of significantly lifting KiwiSaver contributions among women. When introduced, the contribution rate for those on paid parental leave was 14%. Now, the contribution rate is 20%.

When the previous government introduced the policy, the Cabinet paper noted that it was most likely to benefit higher income households because of the “affordability constraints” of continuing contributions to KiwiSaver while on the reduced income of paid parental leave.

So National is proposing to drop the requirement for recipients to keep up KiwiSaver payments to get the government contributions. While it is mainly targeted at mothers, National’s proposed policy would pay the default KiwiSaver rate to whichever parent is taking the parental leave.

“Our policy gets the complications out of the way and just says no matter what, when you're on paid parental leave, you will be getting these payments from the government to ensure that you are benefiting from the compounding interest effects and the compounding growth of your KiwiSaver over time, and you don't miss out during what is a really important time when you're choosing to care for your children,” Willis said.

$625 KiwiSaver boost

According to National’s figures, a mother who has her first baby at age 30 and takes the full 26 weeks paid parental leave in 2028 (when the employer contribution rate will have been increased to 4%) will get $625 extra in her KiwiSaver.

If the same woman had a second child and again took 26 weeks leave in 2031, she would receive another $951.

By the time she hits retirement age, the party has calculated that the payments will be worth $15,000. This assumes an average annual return of 7% and that National’s pledge to gradually increase contribution rates to 6% by 2032 go ahead.

The policy would take effect from 1 July 2027 and be paid for out of the $2.4 billion operating allowances of ‘new money’ Willis had set for next year’s budget.

Young families appear to be a target voter for the major parties this election. Labour this week announced it would make all maternity scans free in an effort to woo that portion of the electorate.

“National's values have always been about strong families, and we recognise that Kiwis choosing to have children are making the ultimate investment in New Zealand's future,” Willis said.

“When they do that, it comes with financial sacrifice. The time in life when you're having kids is a time when you're also juggling lots of costs.”

“Serious times call for serious leadership.”

Luxon also used his speech to make a pitch to voters that National was the “serious” party.

“These are serious times, and the stakes are high,” he said.

He then went on to list policies of other parties that were “not serious”.

“It’s not serious to make $18 billion of promises with no plan to pay for them,” he said referring to the “hidden bill” National has alleged Labour has in its policy plan.

“It’s not serious to spend $30 billion buying a bank, when we already own one,” he said referring to New Zealand Firsts policy to buy back BNZ.

“It's not serious to raise taxes on every New Zealander who works, to further subsidise the lifestyles of those who don't,” referring to the Green’s tax plan announced today.

“It's not serious that when it comes to education, you can't even be bothered answering your emails, let alone lifting achievement,” referring to a Labour MPs failure to engage with the government on bi-partisan NCEA reform.

“And it's not serious that your only policy on law and order is to defund the Police and lower the prison population,” he said - again referring to the Greens.

In response Hipkins said Luxon was only attacking Labour as they didn’t have anything to show for their first term in government.

“The National Party can't campaign on their own track record because everything they promised to do, they've failed to deliver on. They said they were going to grow the economy, they haven't, they said they were going to fix the cost of living, they've made it worse,” he said.

Earlier, campaign chair Simeon Brown had likened the coalition partners to squabbling siblings, and National the adults in the room.

“There are two kids in this house. They get on fine with Mum and Dad, but not always with each other. One wants the heater on, the other throws the window open. One wants the rugby on, the other wants football. It’s up to Mum and Dad to keep the peace,” he said,

“None of it breaks the household – it’s just a distraction.”

“You know who those two kids are, with Mum and Dad in the middle, finding the time in all the noise, to get on and get the job done,” he said.

In response, Act’s David Seymour said he was “surprised” to hear that from Brown.

“I don’t think there’s any room for parties bickering,” he said.