Kids KiwiSaver
Building national savings – one child at a time
New Zealand faces a nationwide savings shortfall, one which threatens our ability to build a resilient economy. A Kids KiwiSaver scheme offers a simple way to boost those national savings, while also lifting financial literacy and giving our young people a roadmap to home ownership and a secure retirement.
Under IDEA’s proposal, all children would be given a KiwiSaver account at birth, complete with kick-start deposit. If the government matched small parental contributions, and provided extra assistance for low-income families, the savings could grow rapidly. Even with parents contributing just a few dollars a week, children could reach adulthood with $10,000-20,000 that they could then roll over into standard KiwiSaver accounts.
This could ensure that every young person in this country turns 18 with a stake in society, with savings and with something to strive for. The scheme could change the lives of children, especially those from disadvantaged backgrounds who would otherwise reach adulthood without any savings. Under Kids KiwiSaver, they could experience economic security, develop financial responsibility, and enjoy a wide range of opportunities.
The power of compounding interest means this could be achieved at modest cost to government. A first-year outlay of $20-80 million could, over time, generate $10bn-plus in savings, strengthening capital markets and creating funds for future projects. Kids KiwiSaver could build our national wealth by investing early – one child at a time.
