A guide to the New Zealand Pension

As we approach retirement, understanding the New Zealand Pension, also known as New Zealand Superannuation (NZ Super) can be crucial for planning a secure and comfortable future. In this guide, we'll break down the essentials of the NZ Pension, covering eligibility criteria, the application process, payments, and additional support.

We'll also take a look at KiwiSaver and how it fits into your retirement planning.

Understanding the NZ Pension

The NZ Pension is a government-provided financial support system for residents aged 65 and older. It is designed to ensure that retirees have a basic income to support their living costs. The pension is a universal benefit, meaning it is available to all eligible New Zealanders regardless of their income or assets.

Eligibility criteria and requirements of the NZ Pension

To qualify for the NZ Pension, you must meet certain criteria.

  • Age requirement: You must be 65 years or older to be eligible – it is important to note that you will not automatically receive the pension once you turn 65, you will need to apply for it.
  • Residency: You need to be a New Zealand citizen or permanent resident. Additionally, you must have lived in New Zealand for at least 10 years since turning 20, with at least 5 of those years after turning 50. 
  • Current residency: You must be living in New Zealand when you apply for the pension.

For more detailed information on eligibility, you can visit the Work and Income website.

What you need to know about the NZ Pension amount and indexation

The NZ Pension is paid fortnightly and is adjusted annually to keep up with inflation and wage growth. The amount you receive depends on your living situation. As of April 2024, the NZ Pension rates are:

  • Single Living Alone: $900 per fortnight
  • Single Sharing: $835 per fortnight
  • Couple (each): $691 per fortnight

These rates are indexed to ensure that the pension keeps pace with the cost of living and other related expenses.

Assistance programs and benefits of the NZ Pension

In addition to the basic pension, there are several assistance programs available to help retirees, including:

  • Disability Allowance: Financial help for those with ongoing health costs due to a disability.
  • Accommodation Supplement: Assistance with housing costs if you are renting, boarding, or paying a mortgage.
  • Living Alone Payment: An extra payment for those who live alone or with someone under 18.

These benefits can significantly enhance your quality of life during retirement.

Can you live on the NZ Pension alone?

While receiving the NZ Pension is a great start, research from Massey University shows a significant gap between it and what retirees are spending.

According to the study, the average household spends more than they receive. For example, the average couple who lives in a metro area with a ‘no frills’ lifestyle will spend $982.02 a fortnight but only receive $763.64, leaving a gap of $218.38.

The Massey University report goes on to say: “Most New Zealanders seeking to achieve the standard of living in retirement that is reflected in these levels of expenditure will still need to make provision for additional income in retirement to supplement the amount received from the NZ Pension.” 

The reality is the NZ Pension is unlikely to provide most people with the lifestyle they were hoping for in retirement. It's likely that for many Kiwis, the NZ Pension alone is just not enough and retirees need to have a clear plan in place to bridge the income gap for their retirement.

What is KiwiSaver?

KiwiSaver is a voluntary, work-based savings initiative designed to help you save for retirement. It complements the NZ Pension by providing additional savings to ensure a more comfortable retirement. Here’s how it works:

  • Contributions: Employees contribute a percentage of their gross salary (3%, 4%, 6%, 8%, or 10%), and employers contribute an additional 3%. The government also contributes with an annual member tax credit up to $521.
  • Investment options: The funds are invested in various assets, and you can choose one that matches your risk tolerance and investment goals.
  • Withdrawals: You can withdraw your savings when you turn 65. Early withdrawals are possible in cases of significant financial hardship, serious illness, or for purchasing a first home.

For more details on how KiwiSaver works, visit the Inland Revenue website.

Planning for a secure retirement

As we navigate our way towards retirement, it’s essential to consider not just the NZ Pension, but also other savings and investments like KiwiSaver. Combining these resources can help ensure financial stability and a comfortable lifestyle during retirement.

Additionally, financial security can extend beyond savings. Life insurance can provide a safety net for your loved ones in case of death or becoming terminally ill. 

By understanding the New Zealand Pension and integrating it with other financial tools like KiwiSaver, we can better prepare for a secure and fulfilling retirement. You may start planning today with Seniors Term Life Insurance and make the most of the available benefits to enjoy peace of mind in your golden years.


This article is an opinion only, provided for general information purposes and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.



27 Aug 2024