Kiwisaver for Kids
I opened a KiwiSaver account for my daughter when she was two years old. Every month, I put a small amount in— it’s $50 now, but back when I started out it was $5 a week. I’ve set it up so she’ll take over at 25, with the option to use it for a house deposit or keep growing it for retirement.
It might not seem like much, but that money has time on its side. And thanks to a powerful little thing called compound interest, even small contributions can grow into something meaningful.
With new changes to KiwiSaver rules in July 2025, it’s easier than ever for parents and teens to set themselves up for the future. So let’s talk about what’s new, why it matters, and how you can get started, no matter your budget.
🆕 What’s changed for 16–17 Year olds?
1. Government contributions are now available
As of 1 July 2025, 16- and 17-year-olds who contribute at least $1,042.86 per year will receive a government top-up of up to $260.72 annually. This used to be reserved for people aged 18 and over.
2. Employer contributions start in April 2026
From April next year, employers will be required to contribute to KiwiSaver for working 16- and 17-year-olds who are making their own contributions.
3. Default contribution rates are going up
Currently, the minimum contribution rate is 3%, but it will rise to 3.5% in 2026 and 4% in 2028. This helps grow balances faster over time.
💸 The magic of compound interest
Here’s the thing: money in KiwiSaver doesn’t just sit there. It earns returns and those returns earn returns. That’s called compound interest, and it’s the secret sauce to long-term wealth.
Even small, regular contributions can snowball. One expert example:
A teen who starts with $5 a week in a growth fund could reach over $100,000 by their mid-30s if they keep going.
The earlier you start, the bigger the impact. Time is the real MVP here.
👩👧 How parents can help (even if you’re not flush with cash)
✅ 1. Open an account early
Kids aren’t automatically enrolled in KiwiSaver until age 18, so you’ll need to do this manually. Most providers let you set one up online in minutes.
✅ 2. Contribute what you can
You don’t need to max it out, just build a habit. Even $10/month helps. If your child is 16 or 17, you could try and aim for the $1,042.86 annual threshold to unlock the full government bonus, which would work out at just under $87 to contribute a month.
✅ 3. Track contributions together
Use Sorted.org.nz or your KiwiSaver provider to make sure you're on track for that government top-up.
✅ 4. Choose a growth fund
Because the money is locked away for the long term, a growth or aggressive fund can offer higher returns. You can switch funds anytime if your needs change.
✅ 5. Get your child involved
Show them how their balance grows, talk about saving for big goals, and help them understand the power of long-term investing.
✅ 6. Let family chip in
Grandparents or extended whānau can contribute too—it all adds up.
💬 But what about the downsides?
A few things to keep in mind:
Under 16? No government or employer contributions yet—just what you or your child put in.
Funds are locked in until a first home purchase or retirement—so it’s not suitable for short-term savings like uni or travel.
Watch the fees – Some providers waive fees for kids, but not all. Make sure your child’s balance isn’t being eaten up by charges.
🧠 What experts are saying
Financial experts are calling the new policy changes a “game-changer” for teen savers. Why? Because starting early sets kids up for:
Bigger balances through compounding
A head start on home ownership or retirement
Financial literacy that sticks for life
Yes, there are concerns about equity, not all families can afford to contribute. But even if you can’t do much, know this: something is always better than nothing.
💌 A note from me
I don’t see my daughter’s KiwiSaver as a magic solution. I see it as one part of a bigger picture, just like teaching her to cook, to budget, or to ask for what she’s worth. It’s one more way I’m trying to give her a future that feels steady and free.
We talk a lot about generational wealth and how to break cycles. This? It’s one small but powerful tool in that toolkit.
