Increasing the Government contribution to KiwiSaver members’ funds could help encourage more self-employed workers to contribute to the scheme, says New Zealand’s premier accounting professionals Tutbury & Associates Limited.
Statistics show that one in 20 employed New Zealanders are currently a contractor. But research from the Retirement Commission shows that only 40 per cent of self-employed/contractors/ business owners contribute to KiwiSaver, compared to 73 per cent of workers who are employed full time.
If you're self-employed it is not compulsory to contribute a proportion of your pay. Instead, you agree your contribution level with your provider.
In its current state, KiwiSaver members get 50c for every dollar they put in up to a maximum of $521 from the Government for every year they are a member of KiwiSaver. “This can be an issue for some self-employed people, who do not have the enticement of an employer contribution to help them to save,” says Kelly Tutbury, Accountant and Managing Director at Tutbury & Associates Limited.
Retirement Commissioner has suggested that by increasing the KiwiSaver member tax credit to up to $2000 a year can get more self-employed people to contribute to the scheme.
Peter Cordtz, Interim Retirement Commissioner, also recommended that government contributions should also be increased from 50c for every dollar up to $521, to $2 for every dollar up to $1000. A $1000 of their own money and $2000 from the Government, would give members an extra $3000 in their accounts each year.
"This could encourage a wider range of people, such as the self-employed, to save more towards their retirement," advises Kelly.
Ideal for the self-employed, at Tutbury & Associates “we are passionate about your finance and offer a range of services to help you with all of your financial planning needs, including KiwiSaver,” adds Kelly.
About Tutbury & Associates Limited:
Though they are centrally located in Tauranga, Tutbury & Associates Limited are cloud-based. Ideal for trades people, or anyone who wants to grow their business, Tutbury & Associates Limited offers expert services in compilation, financial planning, taxation, business accounting, family trusts and Xero bundles for their clients across New Zealand.
Contact Tutbury & Associates Limited:
Phone: 07 576 2194
Address: 23 Myres Street Tauranga
Phone: 0274 587 724