KiwiSaver for families.
Implications for your KiwiSaver balance on paid parental leave and signing your kids up.
KiwiSaver in your family.
If your family is down to a single income, it can seem like a stretch to make voluntary contributions to KiwiSaver. It's tempting to take a savings suspension.
However, if you do manage to contribute enough to receive the free government contribution, you're getting an immediate 50% return on your money. A return like that is almost impossible to beat and it really does add up over a lifetime.
Only the contributions you make, such as member contributions deducted automatically from your salary (if employed) or any direct deposits you make to your KiwiSaver account, are counted towards your Government contribution entitlement. Employer contributions are not included.
Eligibility for the First Home Grant
It's important to know that you must make minimum contributions (even while on parental leave) if you want to access the First Home Grant. To get the First Home grant, you need to be a KiwiSaver member for at least 3 years and you need to have been contributing the equivalent of 3% of your total income during that time. If you're not currently earning, the minimum contribution is 3% of the minimum wage you would receive if you worked a 40-hour week.
Kids in KiwiSaver
KiwiSaver is an investment with unique benefits that suit most New Zealanders. The advantages of KiwiSaver for kids are that it's free to join, the fees are low compared to other types of investment funds, and it's an easy way to teach kids about the benefits of investing. If their grandparents want to make contributions to their future, a KiwiSaver account could provide an easy way to do it. Also, they have a head start on their saving when they do get that first job and start contributing themselves.
That said, but there are fewer advantages for those under the age of 18. There are no government contributions and no employer contributions.
Perhaps the biggest drawback is the permanence: If you enrol your child in KiwiSaver, there's no option for them to un-enrol themselves later. And any money in their KiwiSaver account is stuck there until they buy a first house (or in other limited circumstances) or turn 65. That means you need to be certain before you sign them up.
If your kids are old enough, you can use KiwiSaver as an opportunity to talk to them about money.
We're here to help
Having young children can be one of the trickiest financial periods in life, particularly if your income is reduced and your expenses may be even higher than before your baby arrived. If you're having difficulty making debt repayments or you want to learn more about managing your money, we have resources available.
You can also contact a KiwiSaver specialist for help understanding your options.
Things you should know.
The information above is subject to changes to government policy and law, and changes to the Westpac KiwiSaver Scheme from time to time.
BT Funds Management (NZ) Limited is the scheme provider and Westpac New Zealand Limited is the distributor, of the Westpac KiwiSaver Scheme (Scheme).
Investments made in the Scheme do not represent bank deposits or other liabilities of Westpac Banking Corporation ABN 33 007 457 141, Westpac New Zealand Limited or other members of the Westpac Group of companies. They are subject to investment and other risks, including possible delays in payment of withdrawal amounts in some circumstances, and loss of investment value, including principal invested. None of BT Funds Management (NZ) Limited (as manager), any member of the Westpac Group of companies, The New Zealand Guardian Trust Company Limited (as supervisor), or any director or nominee of any of those entities, or any other person guarantees the Scheme’s performance, returns or repayment of capital.
For a copy of the Product Disclosure Statement or more information about the Scheme, contact any Westpac branch or call 0508 972 254 or from overseas +64 9 375 9978 (international toll charges apply). You can also download the Product Disclosure Statement.
The ratings issued by SuperRatings Pty Ltd ABN 95 100 192 283 AFSL 311880 (SuperRatings) for Westpac KiwiSaver Scheme (‘Platinum’ rating), are as of 23 November 2021. SuperRatings does not guarantee the data or content contained herein to be accurate, complete, or up-to-date, and it will not have any liability for its use or distribution. Ratings are not financial advice for the purposes of the Financial Markets Conduct Act 2013. Consider your personal circumstances, read the product disclosure statement, and seek independent financial advice before investing. SuperRatings uses objective criteria and receives a fee for publishing awards. Visit superratings.com.au for ratings information and to access the full report. © 2021 SuperRatings. All rights reserved.