KiwiSaver turns 18 with $123 billion under management, but 30% aren't contributing

KiwiSaver has reached a milestone 18 years with funds under management hitting $123.1 billion. Barrass said that like any 18th birthday, there’s a lot to celebrate - but also a lot to think on for the future.

Total funds under management grew by 10.1% to $123.1 billion in the year to 31 March 2025. This was driven by a year-on-year increase of $12.2 billion in contributions and $6.4 billion in net investment returns. The number of KiwiSaver members has reached just under 3.4 million, up 1.5% on the same period last year.

KiwiSaver has also continued to support first home buyers, with nearly $1.8 billion withdrawn by 42,811 members for home purchases. While the number of withdrawals has declined from its 2021 peak, the total amount withdrawn reached its highest level, with average withdrawals now approaching $41,000.

Cumulatively, over $11 billion has been withdrawn for first home purchases since 2010.
Barrass said that there is “probably no other financial product that is so closely associated with the future financial wellbeing of New Zealanders” as KiwiSaver.

“What’s clear - and this is really good news - is that KiwiSaver remains resilient in the middle of economic volatility and uncertainty,” she said. “But there is room for improvement.”

Barrass noted that the number of non-contributing members is on the rise.

“It’s actually very high, with 30% of members of working age not contributing, and that’s up from 20% in 2010,” she explained.

“Even among the active choice members, there are 1.2 million who aren’t currently contributing. I don’t have to tell you about the long-term opportunity cost of foregoing retirement contributions.”

Barrass said that this may well be a reflection of the economic difficulties currently facing Kiwis - seen very tangibly via a noticeable uptick in hardship withdrawals, which reached $0.4 billion.

If this trend of non-contribution continues, she said there is a risk of “stark inequality” between members who contribute regularly and those who don’t.

Barrass added that default KiwiSaver providers also have an obligation to regularly engage with their members to ensure they are getting the most out of their participation in the scheme.

Currently, just under half of members are invested in growth funds, and diversified funds continue to comprise the majority of KiwiSaver assets.

“There is no simple fix,” Barrass said.

“All of us - politicians, policymakers, regulators, KiwiSaver providers and financial advisers - have a role here. That’s why we’re launching the report [at the FSC Conference] this year. All of us have some sort of say in the future of KiwiSaver.”