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KiwiSaver Numbers Surge Past 300,000

by Carla Johnson, Investors, London

28 December 2007

The number of people joining the KiwiSaver scheme continues to defy initial expectations, with over 316,000 New Zealanders signing up in just the first five months, Finance Minister Michael Cullen and Revenue Minister Peter Dunne announced earlier this month.

As at 30 November, 316,865 New Zealanders were actively saving for their retirement through KiwiSaver. This news came just a month after KiwiSaver numbers reached the quarter million mark.

“New Zealanders are embracing KiwiSaver in huge numbers,” the Ministers stated. “They know that KiwiSaver makes saving for retirement easier than ever before.

“One of the most encouraging signs is the large numbers of younger New Zealanders who are joining the scheme," they continued, going on to add that:

"“Nearly 20 per cent of KiwiSavers are younger than 25 and over 33,000 KiwiSavers are less than 20 years old. This is great news as these young New Zealanders are taking up the savings challenge early and will be able to build a substantial nest egg for retirement or in some cases for their first home."

“It’s also encouraging that over half of KiwiSavers are aged under 45."

The Ministers concluded by observing that:

"“It is also important to note that KiwiSaver will build up a substantial pool of domestic capital available for local firms to draw from for investment."

“The large pool of savings built up as a result of superannuation schemes in Australia has been sighted by some commentators as the single most important factor behind the growing wealth across the Tasman.”

New legislation giving effect to employer-related KiwiSaver enhancements announced in Budget 2007 was also passed this month.

The legislation aims to strengthen incentives to save for retirement via a KiwiSaver or a complying superannuation scheme. It requires employers to match their employees’ contributions up to 4% of their gross salary or wages, phased in over four years. That measure is accompanied by a new employer tax credit of up to NZ$20 a week to help offset the costs to employers.

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