Call for money for kids as part of KiwiSaver 2.0
Redirecting government KiwiSaver contributions to children and young people could be a way to set them up for life, at little additional cost, KiwiSaver providers say.
Tuesday, February 24th 2026, 9:12AM
KiwiSaver is shaping up to be an election issue this year. Both National and NZ First have so far revealed plans to increase what people must contribute, amid concerns about the future financial sustainability of the NZ Super scheme.
Commentators including investor and director Fraser Whineray, former chief executive of Mercury NZ, have said a reallocation of the government contribution could help.
It has been cut to $260 a year for people who contribute at least $1042, provided they earn less than $180,000.
Whineray said every child could have an account opened by Inland Revenue and $5000 invested into a growth fund by the Government on their behalf. With a family contribution of $100 a year tha could give a child a balance of about $20,000 at 18 and 15 times that by 65.
“Today the taxpayer spends roughly $500m a year on unevenly distributed incentives for people aged 18–64 …Under KiwiSaver 2.0 that money is repurposed: the largest share is redirected to the earliest life stage, and the remainder is used to close parental-leave gaps in working careers.”
Pie Funds chief executive Ana-Marie Lockyer said she supported the idea.
“Directing government contributions to young people at birth, with the benefit of long-term compounding, is a powerful way to build both financial foundations and confidence in investing,” she said.
“We’ve seen this concept in practice before. The UK’s Child Trust Fund - often referred to as a baby bond - was designed to ensure every child had a financial asset at 18, encourage long-term savings habits, and help address wealth inequality. The principle was simple but powerful: start early and let time do the heavy lifting.
“My 22-year-old, who was born in the UK, is heading back there and I recently reminded her to check on her baby bond. Meanwhile, my younger child, born in New Zealand, quite reasonably asked, ‘How come I didn’t get any money when I was born?’ It’s a fair question.”
She said giving children a starting investment created tangible financial benefits over time and normalised investing from the start.
“That early connection to the system can build confidence, engagement and a stronger long-term savings culture, in addition to allowing the effects of compounding work its magic.”
Koura founder Rupert Carlyon said it was a good idea, but there would need to be clear decisions made about why it was being done.
“If we are putting the money into KiwiSaver, then the purpose will simply be to help people buy their first home. I'm not sure there is much difference between this and giving them a first home grant which is easier to do and can be much more targeted - not everyone needs the help or assistance. I'm also not convinced home ownership is the financial panacea that everyone thinks it is either...
“If we were to use it as a way of educating kids and getting them to understand money - that is a very worthy objective - but will need a lot more than simply giving kids a $1000 kick start payment. It is hard enough to get adults to engage with their KiwiSaver and understand it, let alone kids. It's a nice idea, but the reality will be extremely different I fear.’
He said it could be better to spend the money in even more targeted ways.
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