New Zealanders have an average balance of $37,079 in KiwiSaver. File photo. Photo: 123RF
Thousands of New Zealanders in the years just before retirement still have less than $10,000 in their KiwiSaver accounts, new data shows.
The Retirement Commission has released new data from actuaries MJW which shows a breakdown of KiwiSaver balance by age and gender, as at the end of last year.
It showed that overall, New Zealanders had an average balance of $37,079 in KiwiSaver, an increase of $5256 from the previous year. Men had $42,664 on average and women $34,185.
That data, which covers 97 percent of the KiwiSaver industry, shows the gender gap has remained at about 25 percent in the past two years - despite data from individual providers such as Westpac that showed progress towards reducing it.
Te Ara Ahunga Ora Retirement Commission policy lead Dr Michelle Reyers said it was concerning that the gap wasn't coming down, despite improvements in the gender pay gap.
She said the stickiness was a function of a few things, including that the pay gap only measured the difference in men and women's hourly pay rate and did not take into account the fact that one in three women were in part-time paid work, and that women were more likely to be out of the paid workforce entirely.
She said the gap could compound because people starting from a lower base would have lower returns on that initial investment.
The gap peaks at 37 percent for people aged 56 to 65, where men have about $20,000 more on average in KiwiSaver.
Among members aged 61 to 65, in the years just before they become eligible for NZ Super, 35,572 people had a balance of $10,000 or less and 65,833 had $80,000 or more.
Just over 130 people aged 17 and under had $80,000 or more in their accounts.
Reyers said older people approaching retirement with small KiwiSaver balances were probably a function of the fact that they had not had the scheme for their entire working lives.
"It's just having its 18th birthday -it probably needs to be around for another 20-odd years before we see the full impact of having the scheme available across someone's whole working life."
She said it was not clear from the data what other savings people might have, or other assets they could draw on in retirement.
"But it brings into stark relief the importance of NZ Super for people approaching retirement."
She said research had showed 40 percent of those aged over 65 relied entirely on NZ Super in retirement and 20 percent only had a bit more.
Reyers said she had hoped the average balance would be a bit higher but it was positive that the amount was increasing.
"If you look at how many people have balances below $10,000, that number is shrinking over time."
More than a third of people now have less than $10,000 invested. At the same time the number of members with balances of more than $80,000 had generally trended up over time to 12 percent of members from 8 percent in 2021.
"We had expected balances would be higher, that's one of the reasons why as part of the recommendations we put out when we released a paper last year on how KiwiSaver settings could be enhanced, we had the view that we should be increasing the contribution rate to a default 4 percent for employers and have employers pay 4 percent as well. That 8 percent is going to have a quite a big impact for a small change."
She said, with government hinting at the potential for changes to KiwiSaver settings, it seemed that things were moving in the right direction.
Average balances were highest among people aged 86 and over, with an $174,842 average overall and $206,152 for women. But that is likely influenced by the small number of people who have money in KiwiSaver after age 86. There were just 362.
"These people probably wouldn't have used KiwiSaver as an accumulation product as they would mostly have been over the age of 65 when it was first launched - we haven't done additional research into this but we suspect they are using the fund as an investment vehicle in their retirement."
Among the working age population, the largest average balance was among those aged 61 to 65.
Retirement Commissioner Jane Wrightson said changes were needed.
"KiwiSaver has been instrumental in promoting retirement savings in New Zealand, but it's not working as well as it could for everyone. Changes made to the settings now will improve outcomes for all who contribute, and since women live longer on average than men and therefore have longer retirement periods to fund, for this demographic, a rethink is especially critical."
What's the average balance for your age?
The data showed the following average balances for age groups at 31 December, 2024.
Under 17: $3286
18 to 25: $10,028
26 to 30: $19.803
31 to 35: $24,075
36 to 40: $30,437
41 to 45: $39,641
46 to 50: $50,192
51 to 55: $58,940
56 to 60: $65,006
61 to 65: $69,104
66 to 70:L $64,929
71 to 75: $66,634
76 to 80: $66,505
81 to 85: $84,876
86 and over: $174,842
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