New Zealand's retirement savings debate is getting loud. The discussion and proposals span compulsion, contribution rates, default settings; the conversation has urgency behind it. But for all the noise, almost every proposal on the table asks people to do something more; whether that is contributing more, engaging more or waiting more.

Very few ask whether the system and tools are fit for purpose, but that’s the conversation we should be having.

KiwiSaver was built for a different workforce

When KiwiSaver launched in 2007, it was designed around a straightforward assumption: that most people were in stable employment, had regular wages, and therefore predictable PAYE deductions would work for just about everyone. In 2026, for a growing number of New Zealanders, that's simply not how working life looks anymore. Contractors, self-employed, caregivers, seasonal workers and people moving between jobs are all poorly served by a system built on PAYE. Research released by the Retirement Commission in late 2025, found that only 44% of self-employed Kiwis actively contribute to their KiwiSaver, compared to 78% of employees. That gap isn't a discipline problem, but a design problem where those that fall outside of the predictable PAYE environment do not have the frictionless defaults that enable consistent wealth building.

Even for those contributing through PAYE, KiwiSaver tends to operate invisibly in the background. It’s checked occasionally, rarely engaged with, and only loosely connected to the financial decisions people make every day. Aside from periods of market volatility, when panic can trigger ill-advised fund switching and lock in losses, many people only start thinking seriously about KiwiSaver at major life milestones such as buying a first home or approaching retirement. By then, much of the power of compounding has already been lost.

The intent to save is there, but friction, fear and uncertainty often lead to inaction. The most successful financial systems are not those that rely on perfect behaviour, but those that make good behaviour the default. What’s been missing are the tools and infrastructure to make that possible.

But the tools now exist

Using open banking, secure cloud platforms and modern APIs our financial lives can become real-time and frictionless. At Feijoa we’ve built a solution using these rails, and what we’re seeing suggests the potential is real.

Today’s technology enables a fundamentally different model of saving, one that doesn't depend on a particular employment type or a regular pay cycle and fits seamlessly into everyday life. Good financial habits can be automatic and invisible, rather than something that needs to be consciously maintained through decades.

While we’re still relatively new, the evidence is encouraging.  By linking everyday card spending directly to KiwiSaver accounts, our users are collectively contributing $2.5 million a year extra to their retirement savings - a figure forecast to grow to more than $90 million by the time they retire. This isn’t the result of windfalls, lifestyle changes or frugality, but through spare change compounding quietly every day, over time.

There is a structural benefit too. Because contributions are triggered by spending rather than timed investment decisions, users automatically dollar-cost average through all market conditions. They buy more financial assets when prices are low and fewer when prices are high. It’s the  kind of consistent investing that financial advisers recommend. The difference is that it can now happen without anyone having to think about it.

A chance to change it for a generation

Recent KiwiSaver policy changes are pointing in the right direction. From April 2026, employers have been required to make KiwiSaver contributions for 16 and 17-year-old workers for the first time, and the compounding effect of starting that early is hard to overstate.

This generation could be the first to benefit from a retirement savings system that works regardless of how they earn their income. The combination of early KiwiSaver participation, decades of compounding ahead of them, and new technology that makes investing frictionless and automatic are coming together for the first time ever - with the potential to dramatically improve long-term outcomes.
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Building systems where better outcomes are the default

The current KiwiSaver and retirement debate focuses on two broad answers to New Zealand's savings challenge: either compelling people to contribute more whether they want to, can, or not; or keep encouraging them to change their behaviour. Both put the burden back on the individual and will result in people continuing to fall out the bottom of the wealth building funnel.

However, I believe there is another option. Building systems where better savings outcomes happen by default, not through compulsion and not through financial literacy campaigns, but through tools that work with a person’s existing behavior. After all, the most successful financial systems are not those that rely on perfect behaviour, but those that make good behaviour the default.

New Zealand has already taken the first step and the building blocks to a prosperous future are here. Open banking is designed to give New Zealanders more control over their own money and the products available to them. It puts  consumers in control of their financial data and lowers the barriers to new products. Used as intended, open banking can unlock a generation of tools that make good savings outcomes the default, not the exception. Let’s hope New Zealand embraces them.