By Shamubeel Eaqub, Chief Economist, Simplicity Research Hub


KiwiSaver is already a success on many metrics. It has democratised savings: 60% of households now save vs less than 20% in 2007 and there has been a steady tide of savings (contributions + money working on behalf of savers).

But it could be so much more for both members and for nation building.

KiwiSaver is a big pool of savings: $116b in June 2024. (Contributions last year of $10.5b, capital income of $9.3b and withdrawals of $1.7b)

At current trends (back of the envelope), KiwiSaver will be over $1 trillion in 20 years. But it could be more:

• $1.7 trillion if all members contributed (32% didn’t in 2024 - which has a whole host of reasons, and worthy of a closer look that I expect to put more energy into)
• $2 trillion if contributions increased to 12% like Australia is implementing soon
• Over $3 trillion if we did both.

Are we investing our KiwiSaver in the right way? A small natural-hazard-prone country should carefully diversify savings, but there’s also a pragmatic case to invest in NZ assets when there is both high need and high returns on offer.

Foreign investors earn 1.3%pt pa more on their investments in NZ, than we earn on our foreign investments. Our capital markets are also shallow and unsophisticated. Maybe KiwiSavers should get in on some of those juicier returns and improve capital choice.

We could invest more in infrastructure (to fill a $200b+ deficit). If we allocated 10% to infrastructure, that would be over $1b a year. But that is still small compared to the $23b of government investment in 2024. So KiwiSaver needs to grow and learn how to invest differently.







Figure 1 & 2: Share of households contributing to savings & Annual KiwiSaver Flows

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