very interested in joining my two young girls into Kiwi Saver but
am having trouble finding information, that's not biased towards
one particular provider. It is just general information I
require, such as any pitfalls, things to watch for, advantages, any
commitments etc. Is it even a good idea to enroll young children?
Any info greatly appreciated.
Thank you for your question, Kiwisaver is a very popular subject
and we do get asked many questions.
Let's look at the positives of Kiwisaver for Children (bearing in
mind the below comments are based on the current Kiwisaver
1) $1000.00 when you sign them up, it is called the kick
2) It is the start of a long term savings habit, that will
stick with them from their first part time position.
Isn't the best kind of positive habit one you don't even
consciously know you're doing? We have signed our
into Kiwisaver because we envisage that they will put either (under
the current rules) 2% or 4% of their first pay slips into Kiwisaver
and continue doing this right through their teens and early 20's
and really get a head start financially and they won't even realise
that they have a great positive savings habit.
3) If your child decides that they do not want to contribute
when they start working, they can take a contribution holiday
For children there aren't any more complications other than the
need for an IRD number. You can download the form to get
apply to get one here
So what are the negatives;
4) You may pay a small monthly account fee to keep the account
open with whomever you choose to start a Kiwisaver account
5) Your child whilst a minor is not entitled to tax credit
benefits that adults are.
Apart from that, I can't think of any major negatives of joining
a child. To the future, our personal opinion on what will
happen to Kiwisaver is purely based on the current ageing
population trend we have in New Zealand. The 'baby boomers' are
retiring and they are retiring faster and in greater volume, than
there are young people entering the work force and this causes a
big government revenue problem.
In summary we would not be surprised if over the next decade
Kiwisaver to some degree becomes compulsory for all working people.
If compulsion does happen your child will have a little head start
with their account.
Alden & Dean
Family Financial Advisors