KiwiSaver works for full-time workers, but not for part-timers, new research shows
Tuesday, 26 May 2026
KiwiSaver is working well for full-time workers earning $50,000 or more, but it is failing non-workers, part-time workers, and people on very low incomes.
The Retirement Commission Te Ara Ahunga Ora has published new research on KiwiSaver to coincide with its national strategy conference in Auckland on Tuesday.
It showed KiwiSaver was working well for most New Zealanders in steady paid work, with 90% of those earning $50,000 or more contributing.
A policy brief released by the commission with the research said it highlighted the role of settings that reduced contribution interruptions (for example, supporting contributions during paid parental leave,) and better target incentives toward low-income earners, who are least likely to contribute, and most at risk of low balances.
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Compulsion, and re-targeting Government subsidies away from higher earners to lower-earners, and closing a legal loophole that enables employers to dodge making contributions, have been mooted as ways of making KiwiSaver work more fairly.
Political parties have recognised the link between contributions and KiwiSaver balances with New Zealand First saying they would make KiwiSaver compulsory, and National increasing contribution rates.
The research highlighted how income and work patterns shaped KiwiSaver participation and outcomes, said Dr Michelle Reyers, policy lead at the commission.
KiwiSaver contributions from both employers and employees are determined as percentages of their income, so balances were larger on average for men and higher earners.
The KiwiSaver savings gender gap between the average man and woman was now 24%, a difference of $9240.
That gap widens over time, and rises to 36% for people aged 56 to 65.
Reyers said: “Seeing such a high rate, with 90% of people earning $50,000 or more contributing, is a strong signal that KiwiSaver is working as intended for people in stable, full-time work.
“But the flipside is just as important. People on lower incomes, those working part-time, or those moving in and out of paid work, are much less likely to contribute, and their KiwiSaver balances at age 65 reflects these reduced contributions.”
“If we want more New Zealanders to build meaningful savings, we need to focus on closing these gaps. This includes looking at ways to reduce contribution interruptions, such as support during periods of paid parental leave, and targeting incentives toward low-income earners who are less likely to contribute and most at risk of low balances,” Reyers said.
NZ Super, the universal state pension, was the foundation for Kiwi retirements, but KiwiSaver was becoming more important.
In 2025, the average KiwiSaver balance passed the $41,000 mark for the first time, however, outcomes remained uneven across the population.
The research was conducted for the commission by Melville Jessup Weaver, which collected data from KiwiSaver providers covering 3.3 million people, who had a combined $138b in their accounts.
Investment industry veteran David Boyle became retirement commissioner on May 18, and will make his first public appearance at the national strategy day.