Time is running out for KiwiSaver members to ensure they get the full $521 in their accounts from the Government this year - the last time that amount will be available.
If people contribute at least $1042 into their KiwiSaver accountsin the year to June 30, they can receive the maximum $521. Those who contribute less receive the credit at a rate of 50c per $1 contributed.
This is the last year that $521 will be available - from next year the contribution will be halved, and people who earn more than $180,000 a year will not qualify for any credit.
But each year, many people miss out. Only about two-thirds of all KiwiSaver members receive the contribution. This may be because they are not working, on a contributions holiday or self-employed and not contributing enough.
Of those receiving a contribution, 77% received the full $521.43.
The contribution cost the Government about $1 billion last year.
A Fisher Funds spokesperson said about 60% of its members usually received the contribution. There was usually a spike in contributions in the last week of June, she said.
“We ran a campaign and emailed clients who hadn’t yet reached the $1042 threshold. Of those more than 4000 have contributed the full amount. And 1500 have made a deposit to get the 50c for every dollar they have contributed.”
Westpac said that over the last two years, 44% of eligible members did not receive the maximum top-up.
“People who are in a financial position to top up their KiwiSaver contributions to $1042.86 for the year should do so, to maximise their retirement savings for the year,” Nigel Jackson, Westpac KiwiSaver scheme provider BT Funds Management chief executive, said.
Only about two-thirds of all KiwiSaver members receive the contribution. Photo / Getty Images
“There may be a variety of reasons why people haven’t contributed up to the threshold, for example, some members may be on parental leave, some may be working part-time, or others may have temporarily suspended contributions.
“However, if people can afford to top up their contributions, they should do so, as every dollar contributed up to the threshold has an immediate investment return of 50%.”
At Pie Funds, chief executive Ana-Marie Lockyer said about 85% of members received the full amount.
“Government contributions can have a big impact on KiwiSaver balances at retirement, and it’s a shame so many people are missing out. As an industry, there’s always more we can do to boost awareness and ensure more Kiwi savers benefit, recognising that even following the recent budget changes, this contribution alone can grow to more than $41,000 over a 16-year-old’s working life.”
The Retirement Commission said for people earning less than $30,000, the contribution was expected to create up to 20% of their balances at 65 on the existing settings. Once the government contribution was halved, it would be 6% to 11%.
“For members earning $100,000, the percentage point change is much smaller, with the government contribution reducing from 5% down to 1% of accumulated balance, and from 3% down to 0% for members with earnings of $180,000.”
ANZ Investments managing director Fiona Mackenzie said that last year just over 61% of its members received the full government contribution, and a further 16% a partial contribution.
“We have a digital tool in the goMoney app that allows ANZ customers to track their progress against receiving the government contribution. They’ll get an estimate of how much they are on track to get, and an indication of how much more they need to contribute to ensure they get the full government contribution.”
