Flexible NZ Super: What the $98 Billion Saving Would Depend On

Chartered Accountants Australia and New Zealand has modelled letting New Zealanders take NZ Super at 65 or wait each year to 70 for a higher rate.

Its preferred option assumes 40% of eligible retirees wait until 70. It puts the saving at $98 billion over 20 years, and at $7.8 billion a year in 2048, according to RNZ. Peter Vial is head of Chartered Accountants New Zealand.

Under that option, a person claiming at 65 would receive 95% of the current rate. A person waiting until 70 would receive 107.5%. The choice would sit with the person each year from 66 to 70. The age stays at 65. The rate changes.

The fiscal starting point

NZ Super now costs the Government $26 billion a year. That equals 5% of gross domestic product, the total value of goods and services made in a year. About 19% of all tax collected is spent on superannuation.

More than 900,000 people now receive NZ Super. In 10 years, that number is projected to exceed 1.3 million.

By 2048, on unchanged settings, the cost is projected to reach $73 billion a year. That would be 8% of gross domestic product. It would equal 30% of all tax collected.

The demography is clear. In the 1960s there were seven working-age people for every pensioner. There are now four. By 2065 there are projected to be two working-age people for every national superannuitant.

Treasury's long-term fiscal statement, He Tirohanga Mokopuna 2025, puts Government spending per person at $35,900 by 2065 in inflation-adjusted terms, in today's dollars, up from $18,300, with unchanged policy, according to the Treasury.

The design choices

The accountants tested more than one rate structure. The logic is consistent. Take it earlier for less, or later for more, and the Crown carries less cost over time because fewer years are paid at the full rate. It is like slicing the same loaf into fewer, thicker slices if you start late.

If only 20% deferred, rather than 40%, the saving under the 95%-at-65 model would still be $64 billion over 20 years.

An alternative model would hold the age-65 rate at 100%. Deferring to 67 under that model would pay 105%. That version would save $72 billion over 20 years.

A third, steeper model would pay 130% for deferring to 70. It pays the highest rate to late claimants. It was costed alongside the other two.

For officials, the things to check are the take-up rate for deferral, the actuarial adjustment, the maths that sets the discount for early claiming and the increase for late claiming, and the interaction with KiwiSaver drawdown, paid work after 65, and health-related benefit settings. None of those interactions were settled in the modelling release.

The political reception

Finance Minister Nicola Willis has said changes to NZ Super need to be made, but they do not need to be as drastic as those suggested by the OECD, according to the NZ Herald. That statement was reported on 8 May 2026.

NZ First has said if elected, only New Zealand citizens would be eligible for NZ Super from 2029, according to 1News. That policy was reported on 6 September 2026.

There have been earlier proposals about the age. Simon Bridges pledged to gradually raise the age from 65 to 67. A Retirement Commission report recommended that the age remain at 65.

The broader context here is the Beehive arithmetic that every super proposal faces. Universal NZ Super has cross-party support in principle. The cost path does not. Any government that touches the age pays for it at the next election. Any government that does nothing passes a larger bill to the next Parliament.

Looking at what this means for policy-makers, the accountants' preferred model tries to split the difference. It keeps 65. It trims the early-claim rate to 95%. It rewards late claiming at 107.5%. The savings depend entirely on behaviour. Forty percent deferring to 70 is a strong behavioural assumption in a system where 65 is entrenched as the norm. That history explains the interest in flexibility. A straight rise in the age triggers a campaign fight. A voluntary deferral with a higher rate gives ministers language around choice.

In my view, select committee scrutiny, examination by a small group of MPs, would focus on equity as much as fiscal gain. People who can work to 70 gain. People in manual work, with shorter healthy life expectancy, do not. Māori and Pacific outcomes would be central. So would the treatment of renters without other savings, and of women with interrupted work histories. Those distributional questions decide whether flexibility reads as choice or as a cut.

Looking at Budget timing, there is also a fiscal timing point for Treasury and the Ministry of Social Development to weigh. Savings build over 20 years. Costs for administration, communications and integrity sit up front. The 2048 figure of $7.8 billion a year is useful for long-term fiscal strategy. It does not help a Budget framed around the next four years.