KiwiSaver is at a pivotal juncture, with political parties proposing to reshape New Zealand’s largest retirement savings scheme. What could those changes mean, and what should New Zealanders be thinking about as the debate around retirement savings builds? Milford’s Murray Harris, General Manager of KiwiSaver and Investment Funds, talks with Ryan Bridge about the latest policy proposals, the risks of constant tinkering, and the bigger opportunity to strengthen financial resilience and help more Kiwis prepare well for retirement.

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Bridge talks Business: 25 Aug 2026
Episode Transcript

Ryan Bridge
Kia ora and welcome to Episode 90 of Bridge talks Business with Milford. With an election just around the corner, we’ve heard a lot about retirement savings, New Zealand Super and KiwiSaver, of course. Is this election set to become the KiwiSaver election? What are the various political parties thinking about KiwiSaver settings for the future, and how might this impact you? Also, the Financial Services Council has released their Financial Resilience Index. What exactly is that and what does it tell us about ourselves? We’ll answer those questions in today’s podcast, but first, here’s your top five business bits.

 

    1. Surprise bond action from Scott Bessent. He’s Trump’s Treasury Secretary and he jumped into action over those longer-term bond yields that we talked about last week, increasing the size of the 10 to 30-year Treasury buybacks, indicating the Treasury is uncomfortable with the yields and is willing to do something about it. How effective? That’s another question.
    2. Global manufacturing data was out. European activity kept up the strong momentum seen in Q2. This resilience, despite a range of macroeconomic headwinds, helps explain some of the Euro’s recent outperformance, the fundamentals.
    3. There’s some slack in the UK labour market, according to the latest data. The unemployment rate held at 4.9%. They were expecting a drop – wage growth there again softer.
    4. Some softening in the Aussie employment numbers. While overall employment growth was slightly weaker, this was largely driven by part-time employment, which tends to be more volatile than full-time employment.
    5. This week, the big focus is on Jackson Hole, which is central bankers’ meeting. It’s like the Super Bowl for the central bankers. Markets will be particularly interested in hearing from the Fed Chair Warsh, to gain further insight into the Fed’s thinking.

Right, it is time for our sit down segment on the podcast, and I’m delighted to have back in the hot seat today, Murray Harris, who is General Manager of KiwiSaver and Investment Funds at Milford, talking to us about the ‘pollys’, the politics and what they’re promising for KiwiSaver this election. Just a reminder, this segment is informational only and should not be considered financial advice. Murray, welcome back.

Murray Harris
Thanks for having me again.

Ryan Bridge
Great to see you. All right, KiwiSaver, let’s talk about it. Let’s talk about the political parties. What are their various policies? They’re starting to sound pretty kind of serious now, aren’t they, on KiwiSaver?

Murray Harris
They are. I mean, this is the first election I can ever remember where KiwiSaver’s become a hot topic of discussion. So I think that’s really good. Yeah, I think they have realised that KiwiSaver is going to have to work in unison with New Zealand Super, so they better have some really good policies around this.

So, look, we saw back in May, New Zealand First, saying that they would make KiwiSaver compulsory. They would introduce a thousand dollar kickstart for every child born, and that they would move contributions to eight plus eight and then ten plus ten – which is quite generous, with some tax concessions to offset that, because that’s a lot more than any other party is suggesting in contributions.

And then in June, big announcement from National around, again, compulsory KiwiSaver, continuing their path of moving contributions to six plus six out to 2032, a fifteen hundred dollar baby boost for every child born, and then adding paid parental leave payments for those on maternity leave, and compulsory payments for workers over age 65, which is great.

Unfortunately, the one we haven’t heard from is Labour, and, you know, KiwiSaver was their baby, it’s their initiative. We thought we might have heard something a couple of weeks ago at the Financial Services Conference. Barbara Edmonds was a speaker there. She specifically said, I’m not making any announcements today. So for that one, it’s a bit of a wait and see. There is something coming, apparently. So we’ll have to wait and see on that one.

Act. Act are not generally supporters of KiwiSaver, more from the point of view of that they just don’t believe people should be forced to have to do things, and they’re against an increased cost for government or employers. What David Seymour is keen on, though, is diverting some of that KiwiSaver money to Year 11 children – to then give them five hundred dollars each at the start of the year – let them invest that and learn from doing that. So that’s quite a good initiative, but that’s more about financial literacy.

The Opportunities Party are obviously gaining some good traction in the polls. They’re quite similar to National, so compulsory, and then moving to six plus six. We haven’t heard anything from the Greens or Te Pāti Māori on KiwiSaver policy. So look, it’s a real mixed bag, but it’s great that it’s become such a topic of discussion.

Ryan Bridge
And it’s meaty. What you’re talking about is meaty stuff. We’re not tinkering around the edges anymore, are we? And two of the parties you mentioned, New Zealand First and Opportunity – potential kingmakers. So those are some signs that no matter what the makeup of parliament is, there’s a reasonable chance things will change.

Murray Harris
Yeah. We’ve said for a long time we’ve got to stop tinkering with KiwiSaver. You know, it’s 20 years old and it’s had around 30 changes to it, which is just crazy, because all that does is people get confused. They don’t understand what the settings are. They start to lose trust and confidence. So it is good that we’re now starting to see serious talk about long-term policies to make sure that KiwiSaver is working well alongside New Zealand Super, because we know New Zealand Super is not affordable in its current settings. There’s fewer workers paying the taxes to fund the super annuitants. People are living longer. It’s New Zealand’s largest cost outside of health care. So we do need the political parties to be thinking about a long-term retirement system that works well together. And that’s KiwiSaver and New Zealand Super working together.

Ryan Bridge
So for your average punter out there who’s going to the polls November 7, after that, let’s assume just for a second that it’s a National-led government that gets into power. You know, they’re talking about 12 percent. That’s not going to happen like day one, right? It’s a phase in.

Murray Bridge
Yep. Yep. So six plus six out to 2032. Introduction of compulsion from 1 July ‘27. Look, these are real changes that will have a significant impact to savers. So, you know, the compulsion one, you can argue the toss on that, but we do see compulsion being a feature of the most successful retirement saving systems around the world. So, you know, Australia, we look at a lot. The Netherlands, the UK. We know that people,even with the best of intentions of wanting to save voluntarily, there’s always a reason not to. And that has a significant impact come age 65.

We know that small but regular amounts saved and invested well over time adds up to a significant amount of money. So if we take six plus six and apply that today to a 30-year-old who’s earning the average wage of $75,000, they’ve got a current average KiwiSaver balance at that age which is about $25,000 and they’re in a growth fund. Out to age 65, they’ll have $176,000 more saved under the new settings than the current settings today at 3.5%. So they’ll end up with $588,000 versus $412,000. That’s real dollars. That’s $540 per week on top of the New Zealand Super that they’ll be able to spend. That basically doubles their income. New Zealand super, whether you’re a couple receiving it or a single individual, you’re getting around about $500 a week. So that gives you twice the income to spend in your retirement.

Now, you know, that pays for quite a few hobbies or meals out or trips or whatever it might be. And so these are very, very real and significant changes. And then at the overall system level – and KiwiSaver is about $140 billion today – under those settings, it could be a trillion dollars by 2040.

Ryan Bridge
Really?

Murray Harris
And then we’re starting to get real. I mean, we’re still a long way behind Australia. But we’re starting to play catch up. That’s why we need to get serious about it. And that’s why these settings are so important to ensure that we’ve got, again, a really robust retirement savings system. NZ Super, KiwiSaver together.

Ryan Bridge
Right. Let’s talk about the Financial Services Council. You mentioned them. They have a Financial Resilience Index, which they’ve recently put out. What is it and what does it tell us?

Murray Harris
Yeah, this is an annual report commissioned by the Financial Services Council. And it looks at – well, it interviews 2000 households – on how they are feeling about their financial literacy, the financial confidence, their financial resilience and well-being. So it’s quite a good lens on general economy and how households are managing that.

This year – mixed bag – but some really positive signs, positive signs around financial confidence, financial literacy and retirement preparedness. Where there were continued issues is household affordability. You know, inflation is still biting. There’s still real concerns around cost of living. People tapping into their KiwiSaver. And we’re seeing more and more of that to make ends meet.

But focusing on the positives, financial confidence. Two thirds of respondents said they felt extremely or very confident in making financial decisions, which is a real improvement. Financial literacy – respondents are reporting a much greater understanding around terms and phrases and investing theory like risk versus reward, diversification, types of investments that you can invest in, where you can put your money, different asset classes.

Ryan Bridge
Why do you think that is?

Murray Harris
Well, I’ll come to that because I think that alongside the third point, which is preparedness, 52 percent of respondents saying they felt at least somewhat better prepared for retirement. And I think it definitely comes back to the fact that we’ve had 20 years of KiwiSaver and people have just learned as they’ve gone. And it’s nothing like having skin in the game – a bit of money invested – to learn about these things and feel a little bit more confident as a result. So I think it’s really, really positive.

Ryan Bridge
Yeah, I talk to a lot of people about this who say when there’s stuff happening in the global markets – and that’s often one of the reasons people get in touch with us on the podcast or at Milford – is because things are happening in the world. As you say, if you’ve got an account that you know might be impacted by that, then you’re interested in what’s going on. You know, you’ve got skin in the game.

Murray Harris
Well, KiwiSaver has turned three point three million or more than three point three million Kiwis into investors, and a lot of them weren’t previously. So it’s a good thing.

Ryan Bridge
So what role do you think KiwiSaver can play in financial literacy and understanding of financial basics going forward?


Murray Harris
Yeah, I think it’s an extension of the same conversation, right? So the more you’ve got invested – and we saw this in Australia – when balance has got to about the size of a decent car, cost of a car, people really start to engage. Now you’ve got the average balance of KiwiSaver at $40,000. It was only a few years ago, it was $25,000, which is still a decent amount of money. But, you know, $40,000 – and then under these new settings, it’s going to quickly move to $50,000 and then a $100,000. And so people do start to engage more. They do feel more connected. They’re going to ask more questions of their providers.

And we are seeing that really positively play out now with this increased financial literacy as we’ve got people saying, well, look, I’ve got my KiwiSaver. I understand how markets work, how investments work. I’ve got some other money actually sitting in the bank getting no interest or very little interest. I’m actually going to put that into investments as well, but I’m going to put it alongside my KiwiSaver in an investment fund or a managed fund rather than in my KiwiSaver locked up to age 65. So, look, I think that’s a real positive development. And, you know, 20 years into KiwiSaver with a long path to go, I think it’s only going to get better. But the real positives, I think are the politicians are engaged. They understand the real importance of having a really robust savings and retirement system. And the members are getting engaged and they’re learning more from it. So I think it’s just plus, plus, plus – ticks all around.

Ryan Bridge
Good stuff. Murray, lovely to have you back on the podcast. Thank you very much for sharing.

Murray Harris
Thanks.

Ryan Bridge
That was Murray Harris, Head of KiwiSaver and Investment Funds at Milford, talking to us about the election, politics and KiwiSaver. Just a reminder, you can like, follow and subscribe this podcast wherever you like to listen. We love you doing so. Until next week, don’t forget to invest in yourselves.

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