KiwiSaver is a start, but will probably not be the finish line

Staircase
21 hours ago
7 min read

The scale of KiwiSaver is now substantial. The most recent Retirement Commission backed balance study covered 3,351,406 members who had $138.37 billion in total balances, representing about 98% of the total KiwiSaver member base.

So this is not a niche snapshot or a thin sample. It is a very broad picture of where New Zealanders actually stand.

The latest average KiwiSaver balance by age data gives us a clearer picture of where everyday New Zealanders really sit. The headline sounds positive: the average balance is $41,286, up 11.3% in a year (men average $47,452; women $38,212).

Average KiwiSaver balances as at 31 December 2025, including annual growth and the gender balance gap

Average KiwiSaver balance across all members and at ages 61 to 65, as at 31 December 2025. Source: Melville Jessup Weaver KiwiSaver Demographic Study, March 2026, prepared for Te Ara Ahunga Ora Retirement Commission. General information only, not financial advice.

But when you look at the balances close to retirement, the message is blunt.

Among people aged 61 to 65, the average KiwiSaver balance is $77,927.

That is useful money. For many people, it is also not enough, by itself, to create a comfortable retirement. It is worth remembering that people aged 61 to 65 today have not had KiwiSaver for a full working life, because the scheme only began in 2007.

So this is the real takeaway for Staircase readers:

KiwiSaver is a foundation, not a plan. If you want options later, you need a second pillar.

The numbers that should change your thinking

Average KiwiSaver balances by age, as at 31 December 2025.

Now do the simple, real life maths.

Even if someone had around $78,000 at 65 and wanted that money to last, it will likely end up being a modest weekly top up, not a replacement income. At a gross deposit rate of 4%, around $78,000 would generate only about $3,100 a year before tax. Or the $78,000 might fund a car and furniture replacement and a cruise or two and it might smooth out a tough winter. But it is unlikely to buy freedom.

Separate Retirement Commission research published in 2022 found that around 40% of people aged 65 and over had virtually no other income besides NZ Super, and another 20% had only a little more.

The uncomfortable truth: the averages hide a very wide spread

The average KiwiSaver balance by age can hide a big gap between members.

Comparison of KiwiSaver members aged 61 to 65 with balances of $10,000 or less and $80,000 or more

Number of KiwiSaver members aged 61 to 65 by balance level, as at 31 December 2025. Source: Melville Jessup Weaver KiwiSaver Demographic Study, March 2026, prepared for Te Ara Ahunga Ora Retirement Commission. General information only, not financial advice.

Among members included in the balance-band analysis, about one-third still have $10,000 or less. At the other end, almost 449,000 members have more than $80,000, about 15% of the members in that analysis, showing that momentum is building for those who have stayed engaged.

At the two ends of the distribution, we are seeing very different outcomes:

People who have built momentum, and compounding is now working for them.
People who are barely getting started, even late in life.

That kind of gap can create anxiety and political tension later, because the system can start to feel unfair, even when the rules are the same.

That concern becomes even sharper when you look at contribution behaviour. For the first time, the same study measured who is actually putting money in. Among the approximately 3.21 million members for whom contribution status was available, 70% made a contribution during the year to 31 December 2025. The other 30% did not.

The balances follow. Contributing members averaged $50,727. Non-contributing members averaged $19,553. By ages 61 to 65 that difference had widened to $62,150.

Inland Revenue's own figures point the same way. In the year to 30 June 2025, 1,141,521 members made no contribution at all, which is 33% of the total membership.

Inland Revenue KiwiSaver contribution statistics

Not all of those people have permanently disengaged. The category includes children under 18, retirees, people living overseas and people on a savings suspension. But it does show that a very large number of members are not currently building their balances through active contributions. For many people the engine is either idling or barely turning over.

KiwiSaver settings have changed, but they will not solve the core problem

The government has already adjusted KiwiSaver settings.

Timeline of KiwiSaver government, employee, and employer contribution changes from 2025 to 2028

Confirmed and scheduled changes to KiwiSaver government and default contribution rates. Sources: Inland Revenue and business.govt.nz.

From 1 July 2025, the government contribution was reduced from 50 cents to 25 cents for each dollar contributed, which cut the maximum annual government contribution from $521.43 to $260.72.

From the same date, 16 and 17 year olds became eligible for that government contribution, provided they meet the normal criteria.

Also from 1 July 2025, people earning more than $180,000 in taxable income no longer qualify for the government contribution.

From 1 April 2026, the default employee and employer contribution rates rose from 3% to 3.5%. Members could apply from 1 February 2026 for a temporary rate reduction if they wanted to stay at 3%, for a period of between three and twelve months.

Also from 1 April 2026, eligible 16 and 17 year olds began qualifying for employer contributions. They are not auto-enrolled. The auto-enrolment age stays at 18, but a 16 or 17 year old who joins and contributes can now qualify for the compulsory employer contribution.

From 1 April 2028, the default employee and employer contribution rates rise again from 3.5% to 4%.

These are meaningful tweaks. But they do not change the central reality. Many people are still unlikely to end up with a large enough KiwiSaver balance to remove retirement stress unless they either contribute meaningfully more for a very long time, or build wealth somewhere else as well.

The Staircase view: you need a second engine, not just a bigger fuel tank

KiwiSaver is a great habit builder because it is automatic. It comes out before you can spend it. That is its superpower.

But we believe KiwiSaver has two limits:

You are mostly saving from wages, which many households are already stretched on.
You cannot ordinarily borrow against it. KiwiSaver grows through member, employer and government contributions, plus or minus investment returns, less fees, tax and withdrawals.

That second point matters. KiwiSaver does have one direct link to property. After three years of membership you can withdraw almost all of your balance towards a first home, leaving $1,000 in the account. But that is a one-off, and it applies to the home you live in. You cannot use it to buy a rental.

So if your goal is not just “having some savings” but actually building future options, you should seriously consider a second engine that does heavier lifting.

For many households, the most realistic second pillar is property , provided it is approached with discipline rather than hype.

Why a new build, specifically

If we strip out the noise, a well chosen new build can help in four practical ways.

A cleaner start.

New builds generally mean less immediate maintenance shock, fewer hidden problems, and a clearer compliance runway. That matters because surprise costs are the things that break budgets.

A more predictable cashflow story.

Older properties can perform well, but they can also hit you with large repairs at the exact wrong time. New builds tend to reduce that early volatility. Lower drama is a real return.

The forced wealth effect.

With property, part of the wealth build can potentially come from simply holding an asset while time and inflation do their work, rather than relying only on how much you can save from wages.

It aligns with how most New Zealanders actually live.

In New Zealand, housing costs are the biggest line item. Building a strategy that reduces future housing risk is often more powerful than trying to save your way to safety in cash alone.

None of this is a guarantee. Property can go sideways for years. It can fall. It can produce dull returns if you buy poorly or at the wrong part of a cycle. New builds can also carry construction, developer, settlement valuation and finance risks. That is why the how matters.

What Staircase does differently and why it is important

A Staircase new build plan is not “buy property because property always wins.” That is lazy thinking.

A Staircase plan is:

Understanding the risks and your affordability.
Picking the right asset for the right stage of the market.
Stress testing the holding costs.
Building buffers so you do not get forced to sell at the wrong time.
Treating KiwiSaver as the base layer, not the whole retirement strategy.

In other words, we focus on stability first, then growth.

A simple two pillar blueprint

Pillar 1: KiwiSaver

Keep contributing at least enough to receive the compulsory employer contribution you are eligible for.
Do not treat KiwiSaver as your only plan.

Pillar 2: A long term asset that can grow faster than your contributions

For many, that is a new build investment chosen with discipline.
Plan to hold long enough to ride through a property cycle, not just a year or two.

Two-pillar retirement plan combining KiwiSaver with a long-term property asset

The Staircase two-pillar framework for retirement planning. This is a framework, not a guarantee: outcomes vary and asset values can go down as well as up. Staircase Property Group has a commercial interest in property investment. General information only, not financial advice.