KiwiSaver insights: 4 things the new annual report reveals
The FMA's 2025 Annual KiwiSaver Report is out - what does it show?
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With KiwiSaver continuing to grow wealth for New Zealanders, the newly-released Annual KiwiSaver Report provides insights and opportunities about the scheme trusted by so many.
David Callanan, General Manager Corporate Trustee Services, shares his key takeaways from the Financial Markets Authority’s 2025 analysis.
1. Significant growth means KiwiSaver remains the cornerstone of future financial wellbeing
Now in its 18th year, KiwiSaver has matured significantly and has almost 3.4 million members. The report shows total funds under management have grown 10% to $123 billion, driven by $12.2 billion in contributions and $6.4 billion in net investment returns.
FMA Chief Executive Samantha Barrass said: “KiwiSaver has become a trusted scheme that is firmly recognised as the primary retirement savings strategy for most New Zealanders.”
I agree. KiwiSaver is a key tool for people to fund their retirement and, for many, their largest asset after the family home. Larger KiwiSaver balances benefit the individual investors and the wider New Zealand economy significantly.
At Public Trust, we’re also seeing encouraging innovation among the providers we supervise, with increasingly diverse fund offerings, including more aggressive investment options that cater to a wider range of investor needs and goals.
As a supervisor, we’re proud of this progress and remain committed to supporting continued growth that delivers real value to investors.
2. Financial hardship withdrawals continue to increase
The report shows financial hardship withdrawals increased sharply in 2025, increasing 50.8% to 44,099, with a total of $443.6 million withdrawn, up $179.3 million from the previous year.
These figures remind us of the real-life impact economic volatility, living costs and job market uncertainty has on individuals and families. As supervisors, we remain committed to ensuring the integrity of the withdrawal process while supporting providers to guide members through difficult times.
As the supervisor for multiple KiwiSaver schemes, Public Trust plays a hands-on role in reviewing and approving financial hardship applications. This gives us a direct view into the financial pressures many New Zealanders are currently facing.
Market volatility around the world is reflected in investment performance, with net investment returns falling to $6.4 billion, down from $13.1 billion the previous year.
3. Fees have increased proportionately with growth in funds
Total fees deducted from all KiwiSaver schemes this year reached $868.5 million, up 10% from last year. This year’s fee increase broadly aligns with the 10.1% growth in total funds under management, suggesting that fees have increased proportionately.
Total fees paid by KiwiSaver members as a percentage of funds under management remained stable at 0.7%.
As a supervisor, we closely monitor fee structures to ensure they remain reasonable and transparent, and that investors are receiving value for money. In a competitive provider market, it’s essential that providers continually assess: What are members getting in return for the fees they pay?
4. We are holding our own against Australia, but there’s still work to do
Australia’s compulsory superannuation scheme has been in place for over 30 years, making it significantly more advanced and deeply embedded than New Zealand’s KiwiSaver model. With a 12% compulsory contribution rate and AU$4.1 trillion in assets as of March 2025, the scale of Australia’s system is undeniably impressive.
KiwiSaver continues to hold its own, but we can still do more. New Zealand’s further opportunities include reviewing contribution rates and increased participation through incentivising engagement in the scheme and increasing financial literacy.
KiwiSaver is a younger scheme, but one that is growing rapidly. Each year, we see strong growth in funds under management, and increasing engagement from members who view KiwiSaver as a key part of their long-term financial wellbeing.
New Zealand is progressing well. One of the key reasons is no doubt due to the involvement of the NZ Super Fund. Its total fund size was up $8.4 billion from a year earlier, ending the 2025 financial year at $85.1 billion. Earlier this week the Fund reported that over the past 20 years, it has consistently outperformed long-run expectations, generating an average annual return of 9.92%.
Public Trust supervises over $57 billion in KiwiSaver funds, including four of the six default schemes, playing a critical role in ensuring robust oversight and governance across these providers.