- May 30
What does May's 3.25% OCR announcement mean for you?
Adrian, our mortgage specialist, talks through the latest mortgage rates, and what we can expect in the next few months.
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This is a friendly reminder to make sure you have contributed at least $1,042.86 to your KiwiSaver account since 1 July 2024 so that you can receive the full government contribution of $521.43 for the current year
Note, the contribution period is from 1 July 2024 to 30 June 2025.
Now is a great time to top up your balance so that you don’t miss out on free money from the government.
The contribution deadline to receive the maximum government contribution this year is 30 June 2025. To ensure IRD receive this money in time, please make your contributions by Friday, 20 June 2025.
If you’re not sure how much you have contributed to your KiwiSaver this year, here’s how you can find out:
Login to your KiwiSaver provider’s website and check your regular and lump sum contributions made since 1 July 2024.
Login to myIR and check your contributions.
Get in touch with us by sending an email to info@trilogyfs.co.nz and asking for your KiwiSaver contributions amount.
To make a voluntary contribution, you can transfer money to your KiwiSaver provider or contact us and we would be happy to assist.
In the Budget announcement, released 22 May 2025, there have been a few changes made to KiwiSaver including changes to the government contribution. These changes will take effect from July 1 2025. The changes will not affect the government contribution for the current year, which will be paid out in July and August 2025.
The benefits of dollar-cost averaging
Dollar-cost averaging is an investment strategy that involves investing the same amount of money at regular intervals over a certain period of time, regardless of price.
The benefits of dollar-cost averaging include:
Can reduce the overall impact of price volatility. By investing a fixed amount regularly, investors can average out their purchase price over time.
May lower the average cost per unit. By buying regularly, investors buy more shares at lower prices and fewer shares at higher prices.
It builds the habit of investing regularly over time. By taking the emotion out of investing, you no longer have to be concerned about the best time to invest and it helps you avoid the pitfalls of market timing.
If you're on a salary and contributing to KiwiSaver, you're already naturally employing a dollar-cost averaging strategy with your regular contributions. This also applies if you’re self-employed and have regular (i.e., weekly, fortnightly, monthly) contributions set up.
If you have a lump sum that you would like to invest, a dollar-cost averaging strategy may be a prudent approach. Give us a call at 09 553 8928 or email us at info@trilogyfs.co.nz, and we would be happy to discuss if this is the best option for you.
Global market update
United States
The S&P 500 is trading at about 5% below its all-time high after a swift five-week recovery, despite ongoing concerns about tariffs, a recent Moody’s downgrade of US government credit, and questions about the sustainability of the rally; major tech stocks continue to lead gains.
New Zealand
The NZX 50 rose about 6.9% in the past month, supported by positive sentiment from US-China tariff reductions and strong performances from companies like Sanford, Mainfreight, Fonterra, and Auckland Airport; however, retail spending was flat in April and net migration has dropped sharply year-on-year.
2025 Growth Budget includes a $577 million boost for the film industry, over $600 million for rail upgrades, and a new $190 million Social Investment Fund, signaling a government focus on infrastructure and social services.
Australia
The ASX 200 rose about 0.7% in the past week but is expected to lower following a Wall Street selloff driven by rising Treasury yields and deficit fears; energy stocks may face pressure from falling oil prices, while gold stocks are buoyed by a rise in gold prices amid a weaker US dollar and geopolitical uncertainty.
The IMF has downgraded Australia’s growth outlook for 2025, citing global trade tensions and domestic economic uncertainty, though global growth remains above recession levels
Asia
Asian markets are experiencing renewed optimism thanks to a significant de-escalation in US-China trade tensions, which has boosted global indices and investor appetite for smaller and emerging companies, particularly in sectors outside the traditional market leaders.
Europe
European markets have remained volatile in May, driven by ongoing macroeconomic uncertainty and concerns over global trade tensions. UK government borrowing costs have risen, with 10-year gilt yields increasing amid fiscal pressures and cautious investor sentiment. This environment has led to a defensive stance among investors, weighing on market confidence and prompting companies to revise earnings expectations.
- May 23
Finance Minister Nicola Willis has released ‘The Growth Budget’ for 2025.
Some of the key highlights include:
Changes to KiwiSaver.
A tax incentive for businesses.
Investments in health, education, law and order, and other public services.
Defence Force funding.
New infrastructure, including hospitals and schools.
Targeted cost-of-living support.
What are the main changes, and what do they mean for you?
Read on to find out.
KiwiSaver changes
Summary of key changes:
The default employee and employer contribution rate is increasing to 4%. This increase will happen in two steps: increasing to 3.5% from 1 April 2026, then increasing to 4.0% from 1 April 2028.
If you are unable to contribute at these higher rates, you can opt to stay at a 3.0% contribution rate for up to 12 months at a time. You can renew this rate before you’re automatically bumped up to the new default rate.
The government will extend the government contribution to 16- and 17-year-old KiwiSaver members from 1 July 2025 and extend employer matching contribution to 16- and 17-year-olds KiwiSaver members from 1 April 2026.
The annual government contribution is being reduced from $521.43, up to a maximum of $260.72. The contribution rate is being halved from 50 cents per dollar to 25 cents per dollar. These changes take place from 1 July 2025.
Members with an income of more than $180,000 will not receive the government contribution from 1 July 2025.
What this means for you:
Despite a reduced government contribution rate, the government contribution still provides a good 25% return on $1042.86 per year between ages 16 and 65.
Increasing contribution rates is a step in the right direction, which means that KiwiSaver balances will grow faster.
Minors aged 16 and 17 can now receive government contributions and employer matching contributions.
These KiwiSaver changes are being rolled out over the next few years, which gives businesses adequate time to plan their cash flows and adjust systems to implement these changes.
Members with an income of over $180,000 will still get employer matching contributions up to 4.0% by April 2028 but no longer receive any government contribution from 1 July 2025.
The New Zealand Retirement Expenditure Guidelines, researched and published by Massey University, note that an average couple living in a city will need about $1,739.85 per week to have a comfortable (choices) retirement. NZ Super will contribute $828.34 per week for couples (after tax). Having saving schemes like KiwiSaver helps to close the gap between how much more you need to save in order to have a comfortable retirement.
Investment Boost
Summary of key changes:
Businesses can deduct 20% of a new asset’s value from that year’s taxable income, on top of normal depreciation.
What this means for you:
If you are a business owner that invests in productive assets like machinery, tools, and equipment, Investment Boost can help improve business cash flow and make more investment opportunities financially viable.
The government forecasts that this policy could boost GDP by 1% and wages by 1.5% over the next twenty years.
Other changes
Summary of other key changes:
New funding to ensure New Zealanders can access timely, quality healthcare. This includes a $5.5 billion funding increase for hospitals and specialist services, over $1 billion for health infrastructure, $447 million to expand access to urgent care and after-hours services across New Zealand, and over $1 billion for additional cancer treatments.
New funding to help lift school achievement. This includes $646 million to support children with additional learning needs, $100 million of new funding towards extra maths help for students who need it, and a $140 million package for services to lift school attendance.
New funding to continue the government’s efforts to restore law and order. This includes $480 million of additional funding to support frontline policing, $472 million to manage prison growth from stronger sentencing laws, $246 million to reduce court delays and improve access to justice for victims, and $35 million for Customs to combat drug smuggling and organised crime.
New funding to support the provision of social services. This includes $774 million to respond to the Royal Commission of Inquiry into Abuse in Care, $275 million for social investment initiatives including the creation of a Social Investment Fund, and $760 million to support the provision of Disability Support Services.
New funding to support Kiwis doing it tough. This includes increasing the maximum prescription length from three months to twelve months, enabling additional SuperGold cardholders to get a rates rebate, and lower costs for around 115,000 teachers.
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You can also view further information about what the budget delivers using the button below.
If you would like to discuss your KiwiSaver, investment portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters, please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.
We are always happy to help.
Sincerely,
The Team at Trilogy Financial Solutions
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