KiwiSaver Employee Contribution Survey ReportKiwiSaver Employee Contribution Survey Report

A lot’s been said about KiwiSaver rates in recent years—mostly from industry or government—rather than everyday Kiwis. So the Sharesies KiwiSaver Employee Contribution Survey set out to gauge sentiment and bring the thoughts and opinions of everyday KiwiSaver members to the fore.

KiwiSaver contribution rates are important because they can determine our financial well-being and independence, from establishing a foothold on the property ladder via your first home to determining the lifestyle and security you’ll be afforded in retirement. More crucially today, KiwiSaver rates establish the level at which we’re given the control to create a safe and secure future for ourselves, and our whānau.

By conducting this research, we sought to understand the relationship between contributing more earlier, at the cost of less take-home pay in the shorter term. 

Our view is that the current 3% employee contribution will not be enough for many of our investors to retire. While many fund managers agree with this, very little can be found from the point of view of the individual contributor, (who represent such a huge proportion of Aotearoa’s population)—which is why this research felt both necessary and timely.

The Sharesies Employee Contribution Survey

The online survey (reproduced in this report) was sent to 28,000 Sharesies customers at random in late November 2024. 587 responses were received. Of these, 525 people who had a KiwiSaver account went on to answer all questions in the survey. The survey didn’t proceed further if the respondent didn’t have a KiwiSaver account.

To increase or not to increase contribution rates?

When asked, ‘Do you agree with the following statement: I would be happy to take a small decrease in my take-home pay now to have a larger retirement balance later on in life.’ We received a positive 78% response rate—the highest consensus across the 20 questions in the survey. These findings showed strong support for increasing contributions, provided they were gradual; confirming our hypothesis that there is an appetite from contributors to opt for a small drop in their take-home pay now for future gains later.

However, the survey also reflected some education gaps or general uncertainty around contribution rate increases. How a question was phrased—and its placement in the question sequence produced quite different results. For instance, when first asked, 20% of respondents agreed the minimum KiwiSaver employee contribution rate should be higher, and when asked about the ideal minimum contribution rate—only 18% sided with the 3% default. Yet, in a subsequent question, 67% agreed that the ideal contribution rate should be higher than the current 3%. This may indicate that people are unaware of the current settings, as when respondents were asked about lifting the minimum from 3% to 6%, there was 56% support for a significant increase (effectively doubling) the minimum.

When given the option of general contribution increases—the majority of respondents (65%) wanted increases to be gradual, rather than all at once.  

Respondents indicated that their understanding of how KiwiSaver works was high—with 67% selecting ‘knowledgeable’ to describe their relationship to their KiwiSaver. However, we note that this may reflect a Sharesies customer bias. Sharesies customers can tend to have a greater level of knowledge about financial products in general which could also be in part due to Sharesies' financial education content.  When asked how comfortable they felt about their household’s current financial situation, only 4% of people said ‘very uncomfortable’ alongside 10% selecting ‘very comfortable’. The remainder of respondents fell somewhere in the middle between ‘somewhat comfortable’ (36%) or ‘somewhat uncomfortable’ (23%) and ‘neutral’ (26%)—noting respondents' current financial situation would logically impact their responses to our questions.

Will I have enough to retire?

Across the board, respondents were generally unsure if their KiwiSaver balance will be enough for their retirement with 35% answering ‘No’ and 33%  ‘Not sure’ when asked if they’d have enough to retire at their current contribution rate. Nor was there a clear consensus around whether or not KiwiSaver would be the main way to support respondents’ retirement (in the absence of a family home, other investments or accrued assets). This likely reflects that many don’t know how much their KiwiSaver will be worth when they retire, or how much they’ll need to meet their expectations. It also reflects the fact that the default contribution rate of 3% is a false anchor for most Kiwis, providing neither security nor certainty.

How might contribution raises happen?

While many respondents said they didn’t have any concerns about an increase, some did have concerns about being on a low income and how this might practically affect their lives day to day. Of these respondents, many were worried about how this might squeeze them financially with expenses such as rent or mortgage repayments. There was also a consistent suggestion that both employer—as well as employee minimum contributions need to be increased, not just the employee contribution alone. So it’s safe to assume when it comes to KiwiSaver contribution rates—the majority of respondents expect every party should be an active participant.

Key findings

• Respondents were generally unsure if their KiwiSaver will be enough for retirement.

• 55% of respondents supported an increase to the minimum rate from 3% to 6%.

• 65% of respondents preferred an increase to be gradual if it did occur.

• Only 20% of respondents indicated they are planning to increase their contribution rate in the next 12 months. 

• 78% of respondents were more likely to support a small drop in take-home pay for future gains.