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KiwiSaver Annual Report 2016

Investment returns were lower in 2016

Gross investment returns in the year to 30 March 2016 were $1.3 billion, down from $3 billion in 2015. This was due to market performance and lower interest rates.

More people are transferring to a new KiwiSaver provider than joining for the first time

After nine years of KiwiSaver, 2.6 million Kiwis are now saving for retirement through a KiwiSaver scheme. But for the first time this year, there were more people transferring providers than new members joining.

If you’re thinking about changing providers, or if you’re approached to change, it’s important to think about both the pros and the cons. Sorted’s KiwiSaver Fund Finder tool can help you compare funds based on fees, returns and the services you receive - all critical factors to consider when choosing a KiwiSaver provider these. Remember to keep your long-term savings goal in mind and get professional help if you need it.

Our ‘choose your investments’ webpage has more tips on choosing the right investment for you.

People who default into KiwiSaver tend to stay in the default fund

For the first time, this report has looked at how well default KiwiSaver providers are helping their default members choose a fund that’s right for them.

Default funds are low risk but low return and are designed as a holding fund while you make up your mind about what’s right for you. Unless you’re saving for a house, or approaching retirement, most people will be better off in the longer term in a balanced or growth fund. In fact switching from a conservative to a growth fund could increase your retirement savings by $100,000* or more.

Over 1.1 million Kiwis haven’t contributed in the last two months

Making regular ongoing contributions, and lifting your contribution to more than the minimum 3% is the best way to super-charge your KiwiSaver. Lifting your contribution from 3 per cent to 8 per cent would give you $197,000 more* in savings over the life of your KiwiSaver. 

While many of the people who’ve not contributed recently are likely to be children or self-employed, IRD statistics show us over 120,000 people are on a contributions holiday.

Read the report or have a look at the data online

This year we’ve published an interactive online report alongside our written formal report. It’s a designed for industry rather than consumers, but if you’re curious about what’s happening in the industry overall you can check out the graphs here.

You can read the full report here.

*Based on someone with an average salary of $60,000 over their entire career of 47 years, from age 18 to 65. Figures supplied by the Commission for Financial Capability.