welcome to the real world. You pay if you play.

best of all, my Uni education was free, I finished in 1990. This was the last year before Student loans came in.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10567170

So if you were earning $40,000, at 8% you would be contibuting $3,200 p.a. plus employer $800 p.a. and Govt $1,040

So after 3 years you can withdraw $12,000 plus interest returns. After 5 years this would be $20,000. (DISCLAIMER: Depending on what fund you choose, it is possible that you could have lost some money. If you intend to use KiwiSaver to buy your first home, you should start off with a conservative fund).

Depending on the purchase price and location of the house, you may also qualify for the First Home Buyers Subsidy. This is another $1,000 a year for each year you were in KiwiSaver, up to $5,000.

Hence why I think it works well for young couples who plan ahead e.g.

Mr Poli after 3 years $12,000 plus $3,000 = $15,000 plus the same for Mrs Poli = $30,000 Deposit = 10% on a first home of $300,000.

Mr Poli after 5 years $20,000 plus $5,000 = $25,000 plus the same for Mrs Poli = $50,000 Deposit = 10% on a first home of $500,000.

I have a website you can find out more on http://www.oregon.co.nz
Plus Mary Holm has her new book out, which is the bible on KiwiSaver.

Thanks for pointing out my errors Pat.

I’ve sent a new table to the Standard’s gmail. Hopefully the fix will be up soon.

Instead they should set KiwiSaver contributions at 8% from their first payday. They haven’t earned any money to date, so they won’t miss them. On top they get 2% from the employer and $1,040 from govt each year. Over a 40 year working life, this is the best thing they can do. Get used to not having 8%.

On top of that they can withdraw contributions after 3 years to buy a house, plus get an extra $3,000-$5,000 from the first home subsidy. If they are really smart and found their longterm partner, they can buy the house together and he/she can do the same thing – effectively double their deposit.

Bottom line for any new graduate, or anyone entering the workforce for the first time – start KiwiSaver contributions at 8% from day one. If you f*ck up everything else in your life, you will still be in a great position at 65.

If I was you I wouldn’t worry too much about that, this will be controversial enough without making it retrospective.

In response to Tom M – I agree with you that, as a rule of thumb, education leads to better paying jobs, and that as such it makes sense for students to make a contribution towards their education. In fact thats what happens now. In the past tertiary education was virtually fully funded, now students pay a large amount of money towards their education. The question of whether they should pay interest on that is therefore about whether student loans should operate on a more commercial basis or whether the government should provide some support in that area as well as in more general tertiary funding. Given the huge issues with the size of student loans it makes sense for the Government ot limit their impact.

lots of people go to uni or polytec, rack up a student loan and drop-out without completing their degree

Like me. But surely it makes good sense to crate an incentive for people to actually use the loan system the way it was designed?

Personally, I’d like to see policy introduced that if you take out a loan and ‘drop out’ then market interest rates apply immediately upon doing so.

The whole idea of the loan system was to help people get educated, and not to fund questionable lifestyle choices.

I’ll be using this policy, and as a result my Loan will be paid off in the next 12 months.