There’s been a lot of uncertainty and change lately when it comes to KiwiSaver. Firstly, the government overhauled the retirement savings scheme in last month’s budget increasing employee and employer contribution amounts and halving its own contributions from $521 to $260.

The other layer of uncertainty has come from global markets wobbling in response to escalating trade tensions and tariff threats from the US. Many KiwiSaver members and first home buyers were unsettled by a sudden dip in their balances but while it can be tempting to react quickly when your savings take a hit, short-term market shocks are often part of a much longer journey. Before making any moves, it’s important to understand what’s driving the volatility, and how to keep your KiwiSaver on track through uncertain times.

Amy Stevens from Slice says KiwiSaver is linked to shares and shares are inevitably volatile, but just how much it impacts your balance depends on what fund you’re in.

“In general, the one thing to think about if you're looking to buy a home in the near future, is whether a conservative fund might be appropriate, because you don't want to see those fluctuations in your KiwiSaver balance at the same time as you’re going to leverage it for a house deposit.”

If that’s something you’re considering, Stevens says seeking some financial advice is a great first step.

“You can be advised on what fund might be appropriate for you if you’re looking to buy in six months, one year or two years. You want a sound plan that’s going to help you get there.”

But what if your balance has already taken a hit?

“If you've already experienced volatility and it's been quite significant, then sometimes you can add to that damage by trying to switch funds, because you're locking in that loss when you do.”

“If you are looking to buy a home very soon, consider whether it’s worth waiting a little bit and hopefully seeing a lift in the market again.”

WHICH BUYERS HAVE BEEN HIT HARDEST?

Stevens says those who are looking to buy within weeks or months are more likely to be in conservative funds and therefore less likely to have been hit hard by the recent market volatility.

“I think it's probably more those who thought about buying in a year’s time in higher risk funds that have been impacted the most.”

“There will definitely be a bit of stress and fear around that, but I think they've still potentially got six months to see what happens.”

She says the moment your KiwiSaver experiences a sudden drop; it pays to be active and do a bit of research around it.

“You can look at how you can manage it and if there’s a way in which you can increase your balance.”

One thing you can do to manage the losses is consider the fees you’re paying through your KiwiSaver provider.

“Fees are one of the biggest things that actually affect our balance.”

“They can get all the way up to 2%, depending on the provider, which can make quite a difference. That includes management fees, and then sometimes there's a fixed annual fee on top of that as well, which can be a few hundred dollars.”

It’s also useful to make sure that you’re with the right provider for your circumstances.

“You should be constantly comparing different KiwiSaver providers and looking for someone that’s going to be a bit more active with you as you’re looking to purchase a home, so you know you’ve got that ongoing support.”

“This could be things like helping you to maintain a particular balance, or getting you back up to the place you need to be after a sudden loss.”

Stevens says being active, staying educated and asking questions can go a long way.

CAN I SPLIT MY BALANCE ACROSS MULTIPLE FUNDS?

With a home loan you’re able to split it across multiple interest rates and terms, and Stevens says just like a home loan it’s possible to split your KiwiSaver balance across multiple funds.

This means instead of placing your entire balance in either a conservative or high-risk fund, you can minimise your losses and maximise any gains by putting half in each.

“You can do this, but it depends on what provider you're working with. There's some that are more active and will customise things for you, and there are others that are more standardised.”

“Again, it’s about finding the right provider and the right financial advisor as some will be more active and some will be more passive.”

IF I CAN’T WAIT FOR THE MARKET TO BOUNCE BACK, WHAT ARE MY OPTIONS?

Stevens says all hope isn’t lost if your balance takes a dip, as there are plenty of other options to supplement your deposit if you need to use it right now.

“KiwiSaver is just one part. It is really important, and it can make a massive difference, but there are other opportunities too.”

Firstly, co-ownership is a way to bridge the gap. This is where two or more parties purchase and own a home together - that could be with friends, family or your spouse. Alternatively, you could enter the co-ownership model with an organisation like YouOwn.

“YouOwn helps to top you up by investing up to 15% to take your deposit to 20%.”

If that isn’t for you, Stevens says you could consider taking out a temporary loan from someone like a family member if you’re able to.

“Trying not to be too disheartened and thinking about what you can do now as a work around is really important.”

“You can choose to hold off and wait to get on the ladder, but equally right now we've still got purchase prices reasonably low in comparison to where they have been over the last decade.”

That means that while you might not have such a great deposit, you might be able to pick up a better deal overall because there’s more options out there.

“Fast forward to when the economy improves you might have a bigger deposit by then, but it may not be much compared with the property prices you’re working with.”

Stevens says it’s never going to be a perfect storm, and there’ll always be something you’ll need to compromise on.

WHAT ABOUT LOW DEPOSIT LENDING?

Low deposit lending can be an option. Most home loan lenders require a minimum 20% deposit. But with a First Home Loan, you only need a 5% deposit which can be covered by KiwiSaver.

Kāinga Ora underwrite the loan, which means the bank or lender can accept a 5% deposit when they usually would not be able to, but there’s specific criteria you’ll need to meet to get the loan. To be eligible you must:

• Be a New Zealand citizen, permanent resident, or a resident visa holder who is "ordinarily resident in New Zealand"
• Be a first home buyer, or a previous home owner in a similar financial position to a first home buyer
• Have a before tax income from the last 12 months of:
  • $95,000 or less for an individual buyer without dependants; or
  • $150,000 or less for an individual buyer with one or more dependants; or
  • $150,000 or less (combined) for two or more buyers, regardless of the number of dependants
• Be purchasing a home for you to live in as your primary place of residence
• Not own any other property or land, this does not include ownership of Māori land
• be purchasing a property of less than 1 hectare
• Pay a 0.5% Lender’s Mortgage Insurance premium and loan application fee (if applied by the lender)

Market volatility is unsettling, but your KiwiSaver is designed with the long game in mind. Knee-jerk reactions to short-term dips, whether caused by trade wars, political headlines, or economic shifts, can lock in losses and derail your progress.

Instead, focus on your investment horizon, ensure you're in the right fund for your goals and risk tolerance, and seek professional advice if you're unsure. Staying the course during turbulent times is often the smartest move you can make for your financial future.