From first jobs to first homes: How KiwiSaver impacts Kiwis at every stage

For many aspiring homeowners in New Zealand, KiwiSaver is a vital stepping stone between saving and entering the property market. Despite its significance, confusion remains around eligibility, timing and how to use it effectively when purchasing a home.

One of the most common questions buyers ask is whether KiwiSaver can be used to buy a house and the answer depends on several key factors.

 

According to Advanced Mortgage Solutions, KiwiSaver funds can generally be applied toward the purchase of a first home, provided certain criteria are met. These typically include being a member of a KiwiSaver scheme for at least three years and intending to live in the property as your primary residence.

 

However, eligibility is not always straightforward. Some buyers may qualify under “second chance” provisions, even if they have previously owned property. Others must navigate rules around withdrawal limits, minimum balances, and how the funds are applied at settlement.

 

Timing is another critical consideration. KiwiSaver withdrawals are not immediate and require coordination between your solicitor, KiwiSaver provider, and lender. Delays can arise if documentation is incomplete or if the process is left too late in the transaction.

 

Beyond the technicalities, KiwiSaver also plays an important role in lending strategy. For many buyers, it forms a significant portion of the deposit, directly influencing borrowing capacity and lender options. Structuring your application correctly ensures KiwiSaver funds are recognised and aligned with lender requirements.

 

Ultimately, KiwiSaver is more than just a savings scheme—it is often the key that unlocks home ownership. With the right guidance and preparation, buyers can use it confidently as part of a clear and effective pathway into the property market.

A series of KiwiSaver changes will be introduced from 1 April through to 2028, including increased contribution rates rising to 3.5% from April 2026, reduced government contributions, and expanded eligibility for younger workers.

 

Westpac New Zealand is encouraging teenagers to become more engaged with KiwiSaver, as new data reveals low participation among younger members. Over the past year, only 31% of its 16 and 17-year-old KiwiSaver members made contributions, while just 20% received employer contributions.

 

Although not all teenagers in this age group are employed, Andrew Twidle, CEO of BTNZ (Westpac NZ’s KiwiSaver provider), says it’s never too early to start thinking about long-term savings.

 

“If you’re entering the workforce, even part-time, contributing to KiwiSaver is a strong foundation for future financial security. Retirement may feel far away for teenagers, but home ownership is a goal many will have,” he says.

 

From 1 April, employers will be required to contribute to KiwiSaver accounts for all 16- and 17-year-olds who are making contributions themselves. Previously, this requirement only applied to those aged 18 and over. However, under-18s will not be automatically enrolled—they must apply directly to a KiwiSaver scheme and obtain consent from a parent or guardian.

 

This year also marks the first time 16- and 17-year-olds are eligible for the government contribution, which provides 25 cents for every dollar contributed, up to a maximum of $260.72. To receive the full amount, members must contribute $1,042.86 between 1 July 2025 and 30 June 2026.

 

“We’d love to see parents of teenagers talking to their kids about how KiwiSaver works and how they can get the most out of it. That includes looking at how much they’ve contributed over the past year and, if they’re in a position to do so, topping the amount up in order to be eligible for the Government contribution,” Mr Twidle says.

 

The 2023 NZ census showed that 45.1% of New Zealanders aged between 15 and 19 were in part-time or full-time work – up from 33.7% in 2013.

 

“Our own data indicates that at least 30% of 16- and 17-year-olds are likely to be in paid work and we really want to encourage this age group to engage more with KiwiSaver. If you do have a job and haven’t yet signed up for KiwiSaver, take steps to do so. If you’re already in a fund, check in on what type of fund it is, how much you’ve contributed over the past year and what sort of return it has provided.

 

“If you need help choosing a fund or want to learn more about KiwiSaver generally, the Government’s sorted website has a lot of great resources to support both parents and teens.

 

“It’s fantastic that the Government has extended its contributions to this age group and made it compulsory for employers to also make contributions.

 

“It’s likely that uptake of KiwiSaver will now grow among 16 and 17yearolds, so it could be worth policymakers also considering whether there are future opportunities to make the enrolment process simpler and more accessible for young people and their families,” Mr Twidle says.

 

The Westpac data showed no real gender gap in 16 and 17-year-olds’ KiwiSaver balances, with the average female balance in this age group $3,090, a fraction higher than males on $3,084.

 

Westpac research has showed that taking a more growth-focused KiwiSaver strategy earlier in life could mean saving an additional tens of thousands of dollars over several decades.

 

“Anyone who’s saving for the long term – at least 13 years – and who’s ok with seeing their balance go and up and down a bit during that period should be thinking hard about what type of fund they’re choosing,” Mr Twidle says.