It’s no secret that sole traders are an underserved market, especially when it comes to policy conversations and outcomes. Despite being 400,000 strong in New Zealand, they’re underrepresented when it comes to studies, research, and data collection.
Hnry works hard to give our sole trader community a real say – which is why we are proud to have partnered with Te Ara Ahunga Ora Retirement Commission on a first-of-its-kind report: Improving the retirement savings of the self-employed.
Using our own survey data and insights in combination with more widely available research, we were able to outline the current financial situation for sole traders, and how their retirement savings compare to the KiwiSaver funds of employees.
What we found was that sole traders are being left behind – and unless something changes, the gap will continue to widen.
Sole traders aren’t encouraged to prepare for retirement
KiwiSaver was introduced in 2007 to encourage all Kiwi to prepare for retirement. As of 2024, 3.4 million people have opted into the scheme, with that number set to grow.
The incentives for contributing to KiwiSaver are currently weighted towards employees. For starters, they’re automatically enrolled by their employer if they’re eligible. They receive matched employer contributions (increasing to 4% from 1st April 2027), while sole traders only qualify for the government contribution, (slashed in half to $260.72 from 1st July 2025).
The report’s findings show that this has a huge effect on the rate of saving:
- Only 44% of self-employed people contribute to KiwiSaver, compared to 78% of employees.
- Sole traders who do contribute put in an average of just 2.6% of their income – and without employer top-ups, that’s less than half of what employees contribute.
- Almost one in five sole traders aren’t saving for retirement at all.
Worse still, Hnry’s Sole Trader Pulse data shows that after the recent KiwiSaver changes:
- 24% of sole traders plan to reduce their contributions,
- 6% of sole traders plan to stop contributing altogether
(Hnry’s Sole Trader Pulse is an independently conducted survey of sole traders, the only one of its kind. You can download the most recent Sole Trader Pulse reports from our website.)
The full report is well worth a read, but the numbers paint a stark picture: many sole traders aren’t preparing for retirement, and this will add to growing inequalities, financial pressure, and an increase in the strain on the public system.
What Hnry is doing about it
Hnry has been advocating for sole traders since we first started in 2017. We noticed that in general, sole traders were lumped together with small businesses – despite them having different ways of working and different business needs.
For starters, our Allocations feature makes it easier than ever for sole traders to contribute to their KiwiSaver. While the average contribution rate for sole traders is 2.6%, our users contribute 3.2% of their earnings. That might not seem like a lot, but it could be a difference of thousands of dollars when it comes time to retire, due to compounding returns.
Allocations make it easier to save because they allow sole traders to set aside a percentage of every pay, instead of a set amount every week or month. This is a game changer for workers with irregular earnings, who struggle to save consistently. Traditional banking infrastructure is designed for set amounts, not percentages, which mostly only works for people with predictable incomes.
We also decided to step up for our users with our one-time KiwiSaver giveback. Earlier this year, we randomly selected 500 Hnry customers to top up their KiwiSavers the $260.72 they’ll miss out on due to the slashing of the government contribution. It was a small way to let our sole traders know we have their back – and we’ll keep pushing for a better deal on their behalf.
The start of a bigger conversation
Finally, this report is just the starting point. While the current situation isn’t encouraging, it identifies a range of policy tweaks and changes that could make a real difference for Kiwi sole traders – and the retirement system overall.
Better yet is the fact that our report has received widespread national attention and coverage, including:
This report is significant – it puts sole traders first, at the front of the conversation. That’s in part, why Hnry was founded. We make it easier to be a sole trader, including through our advocacy work. Sorting your taxes is just the beginning.
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