30 May 2022
With a month remaining until the 30 June deadline for New Zealanders to be eligible for an annual government KiwiSaver contribution, ASB says potentially hundreds of thousands of people could miss out on receiving the full benefit.
Every year the New Zealand Government tops up eligible members' accounts with 50c for every $1 they have contributed to KiwiSaver, up to $521.43.
ASB's data shows almost 53% of its members who meet the government's age and joining criteria have contributed at least $1,042.86 for the year and are on track to receive the maximum government contribution by 30 June. The remaining 47% however, are not currently on track to make the most of the benefit.
ASB Head of KiwiSaver Distribution, Hamish Davidson says at current figures, those ASB KiwiSaver Scheme members would miss out on more than $80 million in government contributions, and this trend is likely to be similar across other providers.
"Every year, New Zealanders are collectively missing out on hundreds of millions of dollars by not taking advantage of government contributions.
"Over the long run, an additional $521 a year can generate significant savings. For a New Zealander working from age 18 to 65, receiving the maximum free government contribution each year could add almost $25,000 extra to their retirement fund."
ASB's latest quarterly KiwiSaver survey results show 62% of Kiwis believe they need to save more for retirement. Receiving the annual Government contribution could help more New Zealanders feel better prepared.
Mr Davidson says New Zealanders should prioritise their retirement savings and contribute more where they can and encourages people to seek guidance and advice on their KiwiSaver to ensure they are making the most of it.
"We're really pleased to see an increase in the percentage of ASB KiwiSaver members tracking to get the maximum government contribution compared to this time last year. We are making a concerted effort to reach out to all our KiwiSaver customers and remind them of this opportunity.
"We know the cost of living is a real concern for Kiwis and saving for retirement might not be top of mind, or it may not be a reality for some people, but we'd encourage anyone who can afford to make extra contributions does so to ensure they receive this benefit," says Mr Davidson.
Last year close to 125,000 ASB KiwiSaver members rushed to make extra voluntary contributions in the month before the cut-off date and this is a trend Mr Davidson hopes to see replicated.
"Government contributions are there to encourage members to save, but essentially, it's free money for those who are eligible, and we want all KiwiSaver members to obtain the full government top up."
KiwiSaver members wanting to find out how they're tracking towards receiving the annual government contribution should contact their KiwiSaver provider.
For more information please visit: https://www.asb.co.nz/kiwisaver/annual-government-contribution.html