The 2025 FMA KiwiSaver Annual Report, in plain English

The Financial Markets Authority publishes a KiwiSaver Annual Report every year. a 32-page summary of how the whole scheme is going, sourced from statutory disclosures the providers have to file. Most members never read it. We've read this one carefully so you don't have to. Here's what matters.

The headline numbers

• $123.1 billion in total KiwiSaver funds under management at 31 March 2025, up 10.1% on the year.
• 3.39 million members, up 1.5% (about 109,000 net new members).
• $36,349 average member balance, up 8.5%.
• $12.2 billion contributed in the year. an all-time high, up 8.8%.
• $6.4 billion in net investment returns, down from $13.1 billion the prior year. a softer market year, but still positive.
• $868.5 million in fees. total fees as a percentage of FUM held steady at 0.71%.

The headline picture is healthy. Total KiwiSaver assets have nearly doubled since 2020 ($62 billion). For most working-age members, KiwiSaver is now genuinely on track to be a significant part of retirement, not a token amount.

Three trends worth understanding

1. Members are switching schemes in record numbers

Over 175,000 members transferred between KiwiSaver schemes in the year. up from 152,000 in 2024 and 132,000 in 2023. Three years of compounding growth. The total value moved between schemes hit $9 billion, up over 50%.

Plus, fund switches within a scheme (e.g, moving from Conservative to Growth at the same provider) jumped 26.5% to over 380,000. The number of members making at least one fund switch this year was nearly 270,000. over 13% of all contributing members.

What it means: the era of "set and forget" is fading. Members are actively re-examining where their money sits. and the data shows they should keep doing it. The FMA itself flagged in this report that "incentives or one-off offers should not distract members from making well-informed investment decisions" and said it will continue to monitor switch incentives.

2. Hardship withdrawals are up sharply. and that's a real-economy signal

44,099 hardship withdrawals were approved this year, up 50.8% on the prior year. Total hardship withdrawals reached $443.6 million. The average withdrawal was just over $10,000.

This is the hardest number in the report. It's a labour-market signal. successful hardship applications were made by 1.3% of all KiwiSaver members in the year, the highest rate on the FMA's records.

If you're in this situation: we built a free hardship eligibility checker that walks you through the qualifying grounds in plain English. No sales pitch, just help.

3. Growth funds now hold nearly half of all KiwiSaver money

Growth funds are now 47.5% of total KiwiSaver FUM, up from 28.3% in 2015. Conservative funds have shrunk from 40.4% in 2015 to 16.2% today.

Members are taking on more risk. partly because the default funds were re-set to Balanced in 2021, and partly because members under 50 increasingly understand that long horizons and growth assets belong together. Whether that's right for you depends on your horizon: the 90-second Health Check tells you what risk band actually fits.

The number that should bother you

30% of working-age members are not contributing. up from about 20% in 2010. Total non-contributing members (including over-65s and under-17s) sit at 1.38 million, or 40.6% of all KiwiSaver members.

Of the active-choice non-contributors, 1.2 million have actively chosen their scheme but aren't currently putting money in. The FMA said this is "an area for improvement" and called on default providers to engage with non-contributing members during volatility and at the end of savings suspensions.

The economic backdrop matters. cost of living has hit hard. But every month you don't contribute is a month you don't earn the government and employer match. The minimum contribution to lock in the full reduced government contribution post-July-2025 is $20.06 a week. Run the Contribution Optimiser to see what you're personally leaving on the table.

What's changed under the bonnet

• Concentration: 10 KiwiSaver schemes now have over $5 billion FUM each. In 2021 only 5 did.
• Engagement: 33,970 members are now actively in default funds (up from ~5,900 in 2022). meaning they chose the default rather than landing there. Their average balance is $17,053 vs $11,012 for default-allocated members.
• First home use: $1.8 billion withdrawn for first home deposits, by 42,811 members. The average withdrawal was nearly $41,000, up 18% on last year.
• Retirement decumulation: Members aged 65+ are increasingly drawing down gradually rather than taking a lump sum. Number of full withdrawals fell 14.1% even though eligible-member numbers grew. KiwiSaver is becoming a retirement income stream, not a one-off cheque.
• Private assets: Providers are slowly adding private equity, private debt and unlisted property to KiwiSaver portfolios. Still a small share, but a structural shift worth watching.

Smiths' take

Three things stand out for us as advisers reading this report:

1. If you haven't reviewed your KiwiSaver in 3+ years, you're now a minority. Hundreds of thousands of members are reviewing every quarter. The default-and-forget cohort is shrinking and exposing themselves to relative under-performance.
2. Fees stabilised at 0.71%. but still vary widely between providers. A 0.5% fee gap on a $50k balance compounds to roughly $200,000 lost over 30 years. The Fee Burn Visualiser shows your specific number.
3. Hardship is up 50.8%. and the FMA flagged the contribution-paused cohort. If your finances are tight, talk to us before you stop contributing. There are options that protect long-term outcomes, including the new temporary 3% reduction (available from 1 February 2026 via myIR) that doesn't fully exit the match.

The full FMA report is publicly available. find it on the FMA's website. It's worth 30 minutes if you want the unfiltered numbers.

If you'd like to talk through what your KiwiSaver looks like against this backdrop, run our 90-second Health Check or call us on 03 374 6800.

Source: Financial Markets Authority KiwiSaver Annual Report 2025 (B30A), published 2025, covering the year to 31 March 2025. All figures are FMA-reported. General information only. not personal financial advice. Past performance is not indicative of future returns.