The latest KiwiSaver Annual Report from the Financial Markets Authority (FMA), highlights how Government’s recent policy tweaks have positively benefitted New Zealanders, Commerce and Consumer Affairs Dr David Clark said today.
“Fourteen people so far have withdrawn their funds early thanks to a rule modification made in March this year. The Government changes enable early access to KiwiSaver funds for people with congenital life-shortening conditions, such as Down syndrome, cerebral palsy, Huntington’s disease and foetal alcohol spectrum disorder,” David Clark said.
“Government wants to ensure all New Zealanders can benefit from the KiwiSaver scheme. I’m glad a number of people are already accessing their funds at the time that’s right for them.
“The report also shows KiwiSaver schemes now have over $81 billion in funds under management and the average KiwiSaver balance was $26,410 as at 31 March 2021.
“Earlier this year the Government announced changes to the KiwiSaver default fund scheme, with the intention of helping more than 356,000 consumers currently in these funds get more bang for their buck come retirement.
“An 18-year-old earning $50,000 a year and contributing three percent of their income to KiwiSaver could have an extra $143,000 when they reach 65, while also paying around $3,900 less in fees.
“The changes ensure that default funds are invested more responsibly, and require providers to actively engage with members at key life-stages – helping them make informed decisions on savings. I look forward to seeing how these changes benefit people when they come into force from 1 December 2021.
“The added bonus for consumers, is that they don’t have to do anything to reap the benefits of the new default providers – they’ll be switched automatically unless they make an active choose to join one of the new default funds.
“It’s fantastic to see the way that KiwiSaver continues to benefit millions of New Zealanders, providing an easy way to save for their future.
“Despite the COVID-19 pandemic, this report shows an increase in overall KiwiSaver membership and an increase in members contributing to their accounts. It’s great to see people using this tool to build a financially secure future for themselves, whether that is saving to buy their first home, or saving for retirement,” David Clark said.