What To Do With Your KiwiSaver in 2025

In 2025, KiwiSaver continues to be one of the most important retirement savings vehicles for New Zealanders. Yet, many people don’t give it the attention it deserves. Whether you’re just starting out, saving for a first home, or preparing for retirement, it’s crucial to make informed decisions about your KiwiSaver. In this blog, we break down the key considerations for 2025, including fund performance, ethical investing, and when you should consider making changes.

Before diving into the details, let’s set the foundation: KiwiSaver is a long-term investment. It’s not something to be traded frequently based on short-term market movements. Making rash decisions—especially during downturns—can cost you in the long run. Stay invested, keep a long-term mindset, and let your money grow over time.

When evaluating your KiwiSaver provider, there are several important factors to consider, such as performance, fees, social responsibility, and access to financial advice.

1. Performance: Are you with a provider that delivers strong long-term returns? The Morningstar quarterly report ranks KiwiSaver providers and can give you insights into how yours is performing.
2. Fees: While low fees are important, it’s also critical to evaluate what you’re getting in return. Some providers justify higher fees with strong returns or better services.
3. Socially Responsible Investing: Does your fund align with your values? Many providers now focus on avoiding investments in industries such as tobacco, gambling, and fossil fuels.
4. Access to Advice: Does your provider offer financial advice and clear communication? Having a professional help guide your investment decisions can be a game-changer.

For those in growth funds (which typically have 80% in high-risk assets like shares and property), the best performers over the last five years are:

• Pathfinder Growth Fund (10.1% per annum) – Now with a five-year track record, Pathfinder has taken the top spot. They’re also one of the most socially responsible providers, focusing on ethical investments such as water purification, sustainable development, and solar energy.
• Milford Active Growth Fund (9.5% per annum) – A well-established provider with a long-term track record since KiwiSaver started in 2007.

Not all ethical investments are the same. Here’s the key distinction:

• Socially Responsible Investing (SRI): Avoids harmful industries such as tobacco, weapons, and gambling.
• Ethical Investing: Goes a step further by investing only in companies that actively make a positive impact, such as renewable energy or clean technology.

Providers like Pathfinder and Booster lead the way in socially responsible investing, but keep in mind that ethical investment choices can be subjective and vary from person to person.

Aggressive funds are similar to growth funds but have a higher allocation (95%) to shares and property. The best performers include:

• Milford Aggressive Fund (11.3% per annum) – A strong performer that has now reached a five-year track record.
• Booster Socially Responsible High Growth Fund (10.1% per annum) – Similar to Pathfinder in its responsible investment approach but is currently facing regulatory scrutiny.
• Fisher Funds Two Scheme – This fund is now closed to new investors due to its size, which is a sign of its success but limits accessibility.

If you haven’t reviewed your KiwiSaver in a while, now is the time. Some key reasons to reconsider your provider include:

• You’re with a bank-run KiwiSaver fund, which historically underperforms compared to specialist providers.
• You’ve never actively chosen your KiwiSaver provider and were placed in a default fund.
• Your values or risk tolerance have changed, and you want a provider that better aligns with your preferences.
• You want a socially responsible investment option but are unsure which fund is best.

• Employer Contributions: Ensure you’re contributing at least 3% to take full advantage of employer matching.
• First-Home Buyers: If saving for a house, consider increasing your contributions to boost your deposit.
• Government Contributions: If you contribute at least $1,042.86 annually, the government will top up your KiwiSaver with $521.43 each year.

Choosing the right KiwiSaver provider and fund type is crucial for securing your financial future. If you’re unsure about whether you’re in the best fund for your situation, our advisors at Lighthouse Financial can help.

Get in touch today to speak with a KiwiSaver expert and ensure your retirement savings are on the right track!