Watch the Commission for Financial Capability’s resident KiwiSaver expert, David Boyle, in this Sorted Live Q&A.

There’s a bit of misinformation in the air about KiwiSaver these days. Believe it or not, even whether it’s our money – or real money – can be up for question sometimes. 

So it’s time to bust some KiwiSaver myths. Feel free to pitch in any others you’ve come across, but here’s a starter for 10 of beliefs about KiwiSaver that just aren’t true.

1. It’s not really my money.

It’s as real as the money in your savings account, and just as much yours.

2. I can lose all my money.

There is a key difference between a savings account and a KiwiSaver account: the latter can go down as well as up, because your money’s invested in units that can go up and down in value.

But the money’s typically in many diverse investments, so some will do well, others less so, and it’s impossible for all of them to become worthless at once. You’re not gambling, after all.

3. Fees are the most important thing to know.

There’s a lot of talk about fees, but we need to flip our thinking. You need to pay close attention to what type of fund you’re in first, and make sure you’re contributing as much as you can. Then look to see how much you’re paying in fees and what results you get – after fees are taken out.

4. All the funds are the same.

Clearly not. A quick look at the KiwiSaver fund finder shows how varied the 199 funds are. There are different types of funds, charging different fees, offering different services and getting… different results.

5. Employers don’t have to match my contributions.

Oh yes they do! In most circumstances they are required to put in a minimum of 3% for their employees. That is taxed before it goes into our accounts, so it’s typically slightly less, but employers can always opt to put in more for their workers. Many do.

6. KiwiSaver is only for those that work.

No way. Anyone under the age of 65 can join KiwiSaver, including kids, home-making parents, beneficiaries, students or those between jobs.

7. I can never get my money out of KiwiSaver.

The money is typically earmarked for retirement, so it’s good to have it locked up to stay on track. But there are circumstances where it can be withdrawn for a first-home deposit, relationship breakdowns, serious illness or falling on truly hard times.

8. As a non-worker I can’t save $1,043 to get the member tax credit.

Getting the full government contribution to your KiwiSaver each year takes just $20 a week. For every dollar you put in, the government will match it with 50 cents, up to a maximum of $521 for you. Every year, whether you’re working or not. And even if you can only put in $10 or $5, the government will match that in the same way, so it’s still worth doing.

9. I didn’t join KiwiSaver, because if the provider goes bankrupt I will lose all my money.

KiwiSaver funds are trusts set up in your name. If a KiwiSaver provider’s business were to fail, your money would not be lost. It is held in trust – which means it’s “ring-fenced” so it cannot be touched by the business for any other use.

10. If I die, all the money goes back to the Government.

Good news! This is not the case. Since it’s your money, like everything else you own it becomes part of your estate. Set up a will, and your KiwiSaver money will go to whomever you choose.

Comments (5)

Gravatar for Ford


2:24am | 13 Aug 2018

Q: Are there any other issues I need to be aware of before signing my child up to KiwiSaver?

Once you opt in to KiwiSaver, you can’t then opt out, so signing your child up to KiwiSaver is a lifelong commitment. They won’t be able to withdraw their funds, except in some limited circumstances -

Gravatar for Ford


2:19am | 13 Aug 2018

In response to the Kiwisaver survey. One of the questions was "you can choose your own kiwisaver provider". That is not strictly true. In fact some government default scheme providers will refuse to sign you up if you are bankrupt. Other scheme providers won't sign you up if you are in financial hardship because their fees are two high. So far I have had two Kiwisaver providers refuse to sign me up. I was in Kiwisaver with ANZ and they asked me to leave it when I was made bankrupt. I did leave it and tried to sign up again with ANZ but was told the same thing, they don't allow bankrupts to sign up for Kiwisaver with them. Kiwisaver is not optional for parents who sign up their kids. So I said no to the question of Kiwisaver being compulsory because for some people it is.

Gravatar for Gav Hyde

Gav Hyde

12:10pm | 25 Jun 2018

If I am going through a separation my KiwiSaver funds are not included. False. KiwiSaver fund balances are included in the common property unless covered by pre-nuptial agreement or personal property relationship agreement. While they can't be withdrawn they will be included in the +/- division of assets.

Gravatar for Guest


11:15pm | 15 Sep 2017

If during the term of a bankruptcy an undischarged bankrupt makes an application to withdraw their Kiwisaver under hardship and the application is accepted by the fund provider, on release the Official Assignee could make claim to funds as a bankruptcy asset."

Gravatar for Guest


11:12pm | 15 Sep 2017

In a letter to me by the Official Assignee:-
"If during the term of a bankruptcy an undischarged bankrupt makes an application to withdraw their Kiwisaver under hardship and the application is accepted by the fund provider, on release the Official Assignee could make claim to funds as a bankruptcy asset."