KiwiSaver members will be able to choose to contribute at 6 per cent and 10 per cent of their income from today but experts say it won't be right for everyone.

The two new rates add to the existing 3 per cent, 4 per cent and 8 per cent contribution levels and are part of a raft of tweaks to KiwiSaver that were passed as part of a taxation omnibus bill.

The changes will also see the contribution holiday renamed savings suspension and those on a suspension having to reapply once a year instead of five yearly.

From July over 65 year olds will also be able to join KiwiSaver opening it up as a cheaper option for investing compared to other managed funds.


Claire Matthews, a KiwiSaver expert at Massey University, said people shouldn't suddenly increase their contributions because they can.

"It's important that people give real thought to any changes, and seek advice where appropriate, to ensure any changes are right for them."

She said a better time for many people to review their contribution rate was when they had an increase to their regular income.

"At that time people can increase their KiwiSaver contributions without feeling it to the same extent with respect to their disposable/take-home income."

Liz Koh, a financial adviser, said it was a good idea to increase contribution rates for those who were close to being eligible to take the money out - either to buy a first home or at 65 years old.

"The issue is, it is locked in. You don't want to put money in that you might need access to."

Koh said people should look at their cashflow situation before committing the extra savings to KiwiSaver.

"You got make sure you can still day to day living costs."


Koh said those on a low wage or who worked part-time could benefit from increasing their contribution rate as they would be more likely to get the full government contribution.

The government currently puts in 50c for every dollar a member saves up to a cap of $1042 giving members a potential $521 boost every year.

According to Westpac research more than one in four (27 per cent) people would be likely to change their KiwiSaver contributions with the introduction of the new rates and most (97 per cent) would increase their contributions.

A further 49 per cent said they would not change and 12 per cent did not know.

Of those who planned to up their contributions 6 per cent was the most popular choice with nearly half (48 per cent) selecting that option, followed by 29 per cent choosing the 10 per cent option.

Simon Power, general manager of consumer banking and wealth at Westpac, said a person who increased their rate from 4 per cent to 6 per cent could make a huge difference to their retirement savings.

"Many people told us they think they need to increase their savings to fund their desired retirement lifestyle."

But Power said its research also showed more education was needed around KiwiSaver.

"Almost half of people who plan to change their contribution rate do not know they should do this through their employer, while just 35 per cent of people know they have to approach a new KiwiSaver provider if they want to change schemes," he said.

Men were also more confident about which fund they were in and were more likely to have a retirement savings goal in mind and were on track to achieve it.

Just 14 per cent of men surveyed were unaware of the type of fund they were in, compared to 27 per cent of women.

While only 31 per cent of women who had a retirement savings goal in mind thought they were on track to achieve it, compared to 53 per cent of men.

"While some of this will be influenced by the ongoing gender pay gap, women live longer on average than men, and will therefore need more money in retirement.

"It is important to ensure they choose the most appropriate fund based on their appetite for risk and increase their contribution rate if they can afford it."

There is also growing concern among Kiwis about whether they're saving enough for their retirement.

Recent research by ASB found 60 per cent of those surveyed felt they needed to save more for retirement, with the majority of people saying they planned to use their KiwiSaver in retirement to cover daily expenses.

ASB head of KiwiSaver Aidan Vince says it is becoming increasingly clear that Kiwis are not saving enough, and hopes the latest government changes will encourage people to review their savings and increase their contributions where possible.