KiwiSaver Changes April 2026: What to Tell Clients

The Taxation (Budget Measures) Act 2025 introduced the most significant set of KiwiSaver changes since the scheme launched in 2007. Higher default contribution rates, reduced government support, and new eligibility rules all take effect between mid-2025 and April 2028.

For advisers, the immediate priority is clear: every client conversation should address the new default rate, whether a temporary reduction is appropriate, or whether to increase contributions further.

From our conversations with advisers across New Zealand, the most common question is not about the rate itself but about how to communicate it to clients without triggering unnecessary anxiety. This article breaks down each change with the practical detail and conversation framing you need.

Timeline of Changes

Source: Inland Revenue: KiwiSaver changes

The Contribution Rate Increase

From 1 April 2026, the minimum KiwiSaver contribution rate for both employees and employers rises from 3% to 3.5%. This applies automatically to all members currently contributing at 3%.

What This Means in Dollar Terms

For an employee earning $70,000 per year:

That is an additional $700 per year going into KiwiSaver from April 2026, split equally between employee and employer. By 2028, the combined increase reaches $1,400 per year compared to the current rate.

Members already contributing at 4%, 6%, 8%, or 10% are unaffected. The increase only applies to those at the current 3% minimum.

Adviser Conversation Point

For most clients, the 0.5% increase is manageable, roughly $13 per week on a $70,000 salary. The compounding benefit over 20 to 30 years significantly outweighs the short-term reduction in take-home pay. Frame this as the default position: accept the increase unless there is a genuine affordability concern.

The Temporary Rate Reduction Option

Members who cannot afford the increase (or prefer to allocate savings elsewhere) can apply for a temporary rate reduction through myIR from 1 February 2026. This allows them to continue contributing at 3% after 1 April.

Key Details

• Duration: 3 to 12 months (minimum 92 days)
• Reapplicable: Members can apply again after a reduction expires
• Employer matching: Employers may choose to match the reduced rate, but are not required to
• Process: Member applies in myIR, receives a certificate, shows it to their employer
• Restriction: Members with an active KiwiSaver savings suspension cannot apply
• Timing: The reduction cannot take effect before 1 April 2026, even if applied for earlier

Source: Inland Revenue: Changes to the KiwiSaver contribution rate

Adviser Conversation Point

Be careful here. While the option exists, routinely recommending rate reductions could undermine long-term outcomes. The temporary reduction is designed as a safety valve for genuine hardship, not a default recommendation. Your compliance documentation should reflect the reasoning behind any advice to reduce contributions.

Government Contribution Changes

From 1 July 2025 (already in effect), the government contribution to KiwiSaver was reduced:

• Matching rate: From 50 cents to 25 cents per dollar contributed
• Maximum annual contribution: From $521.43 to $260.72
• Minimum contribution to receive full match: $1,042.86 per year ($20.06 per week)
• New income cap: Members earning over $180,000 per year no longer qualify

What This Means for Clients

The reduced government contribution changes the maths for some clients, particularly higher earners. A member earning $200,000 who previously received $521.43 in government contributions now receives nothing.

For members under the income cap, the government contribution still matters, but it is now half as generous. This makes employer contributions and personal savings rate even more important relative to government support.

Adviser Conversation Point

For high-income clients above $180,000, the loss of government contributions may warrant a broader review of their savings strategy. KiwiSaver remains tax-efficient, but the relative attractiveness compared to other investment vehicles shifts when government contributions are removed from the equation.

Youth Eligibility Expansion

Two changes affect younger KiwiSaver members:

1. From 1 July 2025: 16 and 17 year olds became eligible for government contributions (previously age 18 was the threshold)
2. From 1 April 2026: Employers must make compulsory KiwiSaver contributions for employees aged 16 and 17

Adviser Conversation Point

This is a positive change for younger members. Starting employer contributions two years earlier, combined with government contributions, meaningfully increases long-term outcomes through compounding. If you advise families, this is worth highlighting. The earlier contributions start, the more they benefit from growth over time.

What Has Not Changed

Some aspects of KiwiSaver remain unchanged:

• Withdrawal rules: First-home purchase and retirement withdrawal criteria are unchanged
• Voluntary contribution rates: Members can still choose 4%, 6%, 8%, or 10%
• Savings suspensions: The ability to apply for a contributions holiday remains
• Provider choice: Members can still transfer between providers at any time
• Investment fund choice: Members retain full control over fund selection within their provider

Compliance Considerations for Advisers

These changes create several compliance touch points under the Financial Markets Conduct Act and the Code of Professional Conduct for Financial Advice Services:

Documentation Requirements

When discussing contribution rate changes with clients, document:

• The client’s current contribution rate and employment status
• Whether the rate increase applies to them (only affects those at 3%)
• Any recommendation to apply for a temporary rate reduction, with reasoning
• The impact of reduced government contributions on the client’s projected retirement balance
• For high-income clients ($180,000+), how the loss of government contributions affects their overall strategy

Ongoing Advice Obligations

The temporary rate reduction option introduces a recurring decision point. If a client applies for a 3-month reduction, the question of whether to extend, reapply, or accept the higher rate arises multiple times. Build this into your review schedule.

Action Items for Advisers

1. Identify affected clients: Review your client list for members who were contributing at 3% before 1 April. Their rate has now automatically increased to 3.5%
2. Contact affected clients: Discuss the increase and whether a temporary rate reduction is appropriate for their situation
3. Reassess where needed: For clients whose questionnaire was completed before 1 April with a 3% contribution rate, consider initiating a reassessment so their projections reflect the new 3.5% rate
4. Review high-income clients: Anyone earning above $180,000 has already lost government contributions. Ensure their strategy reflects this
5. Document advice: Record the rationale for any contribution rate recommendation, particularly if advising a temporary reduction
6. Calendar the follow-up: For clients who take a temporary reduction (3 to 12 months), schedule a review before the reduction expires. They can reapply, but each period is a decision point

How Nuvano Has Updated for These Changes

If your practice uses Nuvano, the platform has been updated to reflect the April 2026 changes:

• Questionnaire options: Contribution rate selections now include 3.5% for employee, employer, and self-employed rates. Clients on a temporary rate reduction can still select 3%
• Retirement projections: Calculations use whichever contribution rate the client selects, so projections are accurate from the first questionnaire
• Recommendation engine: Fund suitability assessments factor in the contribution amounts the client provides

For clients who completed their questionnaire before 1 April with a 3% rate, consider initiating a reassessment through Nuvano so their projections reflect the updated rate.

Looking Ahead: April 2028

The second contribution rate increase to 4% is legislated for 1 April 2028. While that is two years away, it is worth mentioning in current client conversations, particularly for budgeting purposes. Clients who accept 3.5% now should understand that a further 0.5% increase is coming.

The combined effect of both increases means that by April 2028, a member and their employer will each be contributing a third more than the current 3% rate. On a $70,000 salary, that is $1,400 more per year going into KiwiSaver.

This article summarises changes enacted by the Taxation (Budget Measures) Act 2025. All figures and dates are sourced from Inland Revenue and Business.govt.nz. This article is for informational purposes and does not constitute personalised financial advice.