Everything you need to know about moving to NZ

When you start working in New Zealand, you will be offered the opportunity to join KiwiSaver.

KiwiSaver is a work-based savings initiative designed to encourage New Zealanders aged between 18 and 65 to save for retirement. Employers deduct 4% (or 8% if you choose) of your pre-tax pay, and deposit it into your KiwiSaver account. 

Each new account is credited with a $1000 tax-free contribution from the government, and scheme members are also entitled to a tax credit of $20 per week (or $1040 per year). This will be added directly to their KiwiSaver fund. Scheme fees are also subsidised at $40 per annum. 

Employers can make matching contributions to employee’s KiwiSaver accounts, which are tax-free up to 4%. Compulsory employer contributions will begin on 1 April 2008, starting at 1% of the employee’s gross salary and increasing 1% per year until it reaches 4% on 1 April 2011. 

New Zealanders aged 18-65 who are not currently working can also contribute to a KiwiSaver scheme, and receive the tax credits, the $1000 kick-start sum, and the annual fees subsidy. To receive the full tax credit you must be contributing at least $20 a week to your scheme. You cannot join KiwiSaver if you are over 65. 

Children under 18 can join KiwiSaver and receive the $1000 kick-start and annual fees subsidy, but not the tax credit. Some schemes allow children to make one contribution at the start but do not require further instalments. 

Once you have been contributing to KiwiSaver for one year, you can take indefinite “contributions holidays”, but you will not continue to receive the tax credits while you are not contributing to your scheme. 

Most people will not be able to access the funds held in KiwiSaver until they turn 65, except in special circumstances such as moving overseas permanently or significant financial hardship. One-off withdrawals will be allowed to help scheme members buy their first homes, once they have been contributing for three years. First-home buyers who have been contributing to KiwiSaver for three years will also be eligible for a subsidy, but this is subject to caps both on income and the purchase price of the house. 

Although your contributions are calculated from your pre-tax pay, you do pay tax on your KiwiSaver contributions. Like all New Zealand superannuation funds, investment earnings on your KiwiSaver fund are taxed. This is calculated and paid automatically by your scheme provider. 

Once you reach 65, you can take your fund as a lump sum with no further tax to pay.

A number of KiwiSaver schemes have QROPS approved status, and can accept pension transfers from UK pension providers. Please note that KiwiSaver schemes are far more restrictive than other NZ superannuation schemes, both in terms of when you can access the money and what you can invest it in. We would not normally recommend that a UK migrant lock their transferred pension funds into a KiwiSaver scheme.

For more information, see the KiwiSaver website - http://www.kiwisaver.govt.nz/.