KiwiSaver is like a bank account in your own name, looked after by a fund manager and a trustee.
QUESTION:I haven't joined KiwiSaver because I don't trust the Government. Why should I join if they can keep changing the rules?
ANSWER: KiwiSaver is governed by the KiwiSaver Act 2006. Changes
are not made lightly. Some changes might improve the scheme while others might make it less attractive. If you join and then decide it's not for you, you can take a contributions holiday any time after 12 months (or earlier if you're experiencing financial hardship). The self-employed have even more flexibility and can stop and start as they wish.
The Government has provided strong cash incentives for people to join and membership has exceeded their expectations. Those savers who have been in KiwiSaver from the start have received up to $5168 from the Government, if they have been saving at least $87 a month themselves. That money from the Government - the "kickstart" and annual tax credits of up to $1042 - has gone into their KiwiSaver accounts. In most cases, it will stay there increasing in value until they can access it at age 65 (or after five years if they joined after age 60). Even though the tax credit has been reduced to $521 per year, KiwiSaver is still a generous scheme.
There are now around 1.8 million New Zealanders signed up to KiwiSaver. The largest group of KiwiSaver members is children (age 0-17) with nearly 300,000 (as at March 31, 2011 - according to the official KiwiSaver website). So a large number of New Zealand parents and grandparents have made the decision on behalf of their children, to get the $1000 kickstart. The second largest group is the 55+ age group, whose retirement is fast approaching.
The "sorted" website is a great place to start if you want to do some sums on KiwiSaver. It has two very useful calculators: one shows how much you will save if you join KiwiSaver and another one allows you to compare the fees of the various providers.