Retirement savings gap emerging between self-employed and employees
A joint report from the Retirement Commission and accounting firm Hnry called Improving the retirement savings of the self-employed, found self-employed workers contribute to KiwiSaver at less than half the rate of employees, with many missing out on Government contributions.
Only 44% of self-employed Kiwis actively contribute to KiwiSaver, compared to 78% of employees between April 2024 and March 2025, according to the report.
Meanwhile, 41% of self-employed KiwiSaver members receive no government contribution, often due to irregular income or low earnings.
“Self-employed New Zealanders make up a growing share of our workforce, yet they are being left behind when it comes to retirement savings,” Retirement Commissioner Jane Wrightson said.
“Without meaningful reform, we risk seeing hundreds of thousands of people reach retirement without sufficient financial security.”
This could leave more retirees relying heavily on Government transfers – such as NZ Super and other benefits – as well as other public support, Wrightson said.
“Today’s inaction could become tomorrow’s fiscal burden.”
According to the 2023 Census, New Zealand has more than 420,000 self-employed individuals.
However, recent changes to KiwiSaver announced in this year’s Budget could further diminish retirement savings for self-employed.
From July 1, the Government’s contribution was reduced from 50c for every $1 to 25 cents for every $1 contributed up to $260.72.
The report said the policy change will reduce the retirement savings of self-employed KiwiSaver members, as they face the reduction in the Government contribution with no increase in employer contributions to offset this.
Hnry’s Sole Trader Pulse survey, commissioned two weeks after the Budget, found 24% of sole traders said they would reduce their KiwiSaver contributions because of Budget 2025 policy changes.
A further 6% said they would stop contributing to KiwiSaver altogether.
James Fuller, Hnry chief executive, said retirement savings must work for all New Zealanders, regardless of how they earn their income.
“Right now, we have a two-tier system that favours employees.
“Sole traders face a very real risk of poverty in retirement unless there is a cross-party consensus and policies that help them save more.
“We hope these findings finally lead the Government and Parliament to take this issue seriously.”
The report outlined policy options to improve outcomes for the self-employed based on initiatives already in place in other OECD nations, including:
Flexible percentage-of-income contributions;
Enhanced incentives for low-income contributors;
Innovative savings products such as linked emergency and retirement accounts.
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Even Australians get it - so why not Kiwis???
“Ten years ago, if a heatwave as intense as last week’s record-breaker had hit the east coast, Australia’s power supply may well have buckled. But this time, the system largely operated as we needed, despite some outages.
On Australia’s main grid last quarter, renewables and energy storage contributed more than 50% of supplied electricity for the first time, while wholesale power prices were more than 40% lower than a year earlier.
[…] shifting demand from gas and coal for power and petrol for cars is likely to deliver significantly lower energy bills for households.
Last quarter, wind generation was up almost 30%, grid solar 15% and grid-scale batteries almost tripled their output. Gas generation fell 27% to its lowest level for a quarter century, while coal fell 4.6% to its lowest quarterly level ever.
Gas has long been the most expensive way to produce power. Gas peaking plants tend to fire up only when supply struggles to meet demand and power prices soar. Less demand for gas has flowed through to lower wholesale prices.”
Full article: www.theguardian.com...
If even Australians see the benefit of solar - then why is NZ actively boycotting solar uptake? The increased line rental for electricity was done to make solar less competitive and prevent cost per kWh to rise even more than it did - and electricity costs are expected to rise even more. Especially as National favours gas - which is the most expensive form of generating electricity. Which in turn will accelerate Climate Change, as if New Zealand didn’t have enough problems with droughts, floods, slips, etc. already.
Time to Tickle Your Thinker 🧠
If a zookeeper had 100 pairs of animals in her zoo, and two pairs of babies are born for each one of the original animals, then (sadly) 23 animals don’t survive, how many animals do you have left in total?
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