A new report has revealed the staggering amount of money Kiwis could be missing out on at retirement by making a simple KiwiSaver mistake.
KiwiSaver advisory firm and watchdog National Capital published a report on Monday that covered the second quarter of this year.
From the April to June 2023 quarter, the report used data from National Capital, MorningStar and the FMA to identify trends in KiwiSaver habits and results.
It is shedding light on just how much money Kiwis are missing out on by not making the most of the Government KiwiSaver contributions.
The study showed between July 2021 and June 2022, 1.064 million eligible New Zealanders failed to receive an astonishing $420 million from the government.
This included 580,000 non-contributing members who missed out on a collective $302 million, and 484,000 partial-contributing members who missed out on a further $121 million.
National Capital said the data shows more awareness is needed about how to make the most of the Government contributions.
"Suppose these groups continue on the same path towards retirement. By applying the National Capital Optimal Allocation Index, we can calculate that the total collective amount they would miss out on could be $23.5 billion," the report revealed.
"The Government needs to improve outreach efforts on educating Kiwis on the importance of making at least the minimum contributions to KiwiSaver, even during a cost-of-living crisis when many find it challenging to make ends meet."
The report breaks down the amount lost by age group and contribution. It showed 82,740 people aged 18-24 received no government contribution and would be missing out on a whopping $5.9 billion by the time they retired as a result.
In the same age bracket, 69,025 people received partial government contributions and were missing out on $2.3 billion by retirement.
For people aged 25-34 there were 148,921 people who received no government contribution and as a result, missed out on $6.3 billion and 124,236 who received partial contributions but still missed out on $2.5 billion by retirement.
The figures were also staggering for the 128,841 people aged 35-44 who received no government contribution. In total they missed out on a whopping $2.9 billion by retirement and the 107,485 people in the same age group with partial contributions missed out on $1.1 billion by retirement.
For 45-54 year olds, 116,062 had no government contributions and missed out on $1.2 billion by retirement while 96,824 people had partial contributions and missed out on $500 million by retirement.
There were 103,818 people aged 55-64 who had no government contributions and missed out on $295 million by retirement as a result. A further 86,609 people in the same age bracket had partial contributions but still missed out on $117 million by retirement.
In total 580,382 people had no government contributions and missed out on a whopping $16.8 billion by retirement and 484,180 had partial contributions and missed out on $6.7 billion. In total Kiwis could miss out on $23.5 billion in retirement savings through receiving partial government contributions or not government contributions.
Every year the Government contributes hundreds of dollars to eligible Kiwis' retirement savings.
The $521.43 payment is made to eligible people in June each year. The money is automatically contributed to the KiwiSaver accounts of anyone who has put at least $1042.86 into their KiwiSaver account from July 1 to June 30 each year.
Employer contributions, past government contributions and funds moved from Australian retirement schemes do not count.
Even if you have not saved the full amount, you still get 50 cents for every dollar you put in in the timeframe.
You can contribute to your KiwiSaver through salary and wages, payments to Inland Revenue and payments to your scheme provider.
You can make a voluntary additional contribution to reach $1042.86 as long as it is made by June 30.
More details about how to claim the Government contribution can be found here.