KiwiSaver works by locking your contributions, and any other contributions made to your KiwiSaver account, into a fund of your choice for use on a first home deposit or retirement.
Further details on how KiwiSaver works are as follows:
- You can either choose to enrol into a KiwiSaver fund of your choice, or be default enrolled into a fund upon starting employment
- You can choose to contribute between 3.5% and 10% of your before tax salary
- Your employer must match the contribution that you make directly from your pay to at least a minimum of 3.5%
- You may be eligible to receive the Government contribution of $260.72 each year if you contribute at least $1042.86 each year
- You can withdraw your KiwiSaver investment for your First Home KiwiSaver Withdrawal, or retirement. There are other instances which are less likely as detailed in the FAQ's.
- Your KiwiSaver money is invested in a fund, which is subject to volatility and the potential for returns