KiwiSaver Jargon... Squished

Your guide to actually understanding KiwiSaver terms.

KiwiSaver is meant to help you save for your future—but sometimes it feels like you need a finance degree just to understand what you're signing up for.

At Savvy Saver, we believe in keeping things simple. No fluff. No jargon. Just straight-up answers to help you feel in control of your KiwiSaver. Because making smart choices shouldn’t require a dictionary.

So here’s our take on the most confusing KiwiSaver terms—squished down to easy to understand.

 

Contribution Rate

What they say: “You can contribute 3%, 4%, 6%, 8%, or 10% of your gross salary…”

What it really means: This is the portion of your pay that you choose to put into KiwiSaver. The higher the %, the more you're saving.

Savvy Tip: 3% is the minimum, but if you can bump it up—even to 4%—future you will thank you.

 

Employer Contributions

What they say: “Your employer must contribute at least 3% of your gross salary.”

What it really means: Free money. Seriously. Your employer is legally required to add 3% to your KiwiSaver if you're contributing too.

 

Government Contribution (a.k.a. Member Tax Credit)

What they say: “The government will match your contributions up to $521.43 per year.”

What it really means:  For every $1 you put into your KiwiSaver, the government chips in 50c—up to a maximum of $521.43 each year. To get the full amount, you need to contribute at least $1,042.86 yourself.

Savvy Tip: That’s just $20 a week. Don’t miss this freebie.

 

Fund Type

What they say: “Choose between Conservative, Balanced, Growth, Aggressive, or Lifecycle funds…”

What it really means: It’s about risk and reward. Conservative = safer, but slower growth. Growth = more ups and downs, but higher long-term potential.

 

Not sure where you fit? That’s exactly what our KiwiSaver Quiz is for.

 

Volatility

What they say: “This fund has high volatility.”

What it really means: The value goes up and down more often. It’s normal. It just means your balance might look like a rollercoaster some weeks—but don't stress, over the long run the track generally trends upward 

 

Locked In Until 65

What they say: “Your KiwiSaver is generally locked in until age 65.”

What it really means: You can’t touch the money unless you're buying your first home or you hit retirement age (or a few other rare cases like financial hardship).

 

First Home Withdrawal

What they say: “You may be eligible to withdraw your savings for a first home purchase.”

What it really means: You can use your KiwiSaver to help buy your first home—as long as you’ve been in the scheme for at least 3 years.

 

Default Fund

What they say: “You may be placed in a default fund if you don’t choose one.”

What it really means: If you do nothing, the government plonks you in a low-risk fund. It’s safe, but not tailored to your goals.

Savvy Tip: If you’ve never picked a fund, there’s a good chance you’re in a default one. Time to check.

 

Fund Manager

What they say: “Your provider’s investment team actively manages your fund...”

What it really means: These are the pros making decisions with your money. Some do it hands-on (active), others leave it to the market (passive). Fees can differ.

 

Fees

What they say: “This fund charges a 0.95% annual management fee.”

What it really means: This is what you pay your fund manager. While fees matter, chasing the lowest fee isn’t always the best move. A fund with rock-bottom fees might not provide the returns, service, or active management that justify the cost.

 

The Bottom Line

You don’t need to become a finance expert. You just need enough to make confident choices.

 

And that’s exactly why Savvy Saver exists—to make KiwiSaver easier. No jargon. No guessing. Just a simple quiz, clear answers, and recommendations tailored to you.