My KiwiSaver balance is dropping - what do I do? - Blog - BetterSaver
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My KiwiSaver balance is dropping - what do I do?

December 3, 2020

Have you noticed your KiwiSaver balance dropping recently? You’re not alone.

The coronavirus pandemic has disrupted our lifestyles and put the economy in upheaval. For a lot of us, the last decade had seen a mostly steady pattern of growth or a gentle flattening out in our KiwiSaver funds. Now, a lot of KiwiSaver balances are dropping, in sharp contrast to what we had become used to.

Now, if this were a Hollywood movie you would see manic people shouting ‘Sell! Sell! Sell!’ into the phones amid general pandemonium as everyone panics. Luckily this is not a Hollywood movie, no matter how much it may seem like Quentin Tarantino has had a hand in directing 2020.

There’s no need to panic. We are here to give you the information you need to take KiwiSaver off of your list of worries. First, we’ll let you in on why your balance sometimes drops. Then we’ll guide you through our tips so you can make the best choices for your situation.

Why your KiwiSaver balance drops

When you see your KiwiSaver balance dropping, it might seem like your money is disappearing and it can leave you feeling kind of powerless. But it’s important to remember that your KiwiSaver account doesn’t act like a savings account, where you make deposits and the balance only declines if you take your money out. KiwiSaver is an investment account, where your money buys ‘units’ of investments. Your balance reflects how much your investment is currently worth and can go up or down on a given day.

Everyone is affected by Covid-19, including the businesses your funds are invested in. This means your investment has less value right now. A lot of people are seeing their KiwiSaver balances take a tumble because their assets are not worth as much today as they were in the days before the virus.

This isn’t just happening to you, it’s happening everywhere.

What to do when your KiwiSaver balance drops

The team at BetterSaver are here to do the research for you to make sure you understand how KiwiSaver works and feel confident that you’re doing the right thing. Once you get it, you’ll see there’s no need to stress.

Read on for our top tips on what to do when your KiwiSaver takes a nosedive.


Ups and downs are a normal part of investing. And we don’t make good decisions when we panic (i.e. stockpiling toilet paper).

· DON’T immediately start moving your funds around.

Your KiwiSaver is a long-term investment, so you don’t want to make short-term decisions.

· DO take the time to make sure you are in the right fund for you.

Being in a fund that matches your risk level and goal timeframe means you don’t have to worry about everyday ups and downs – you’ll still be on track to meet your goals.

· DO keep contributing.

Consistent contributions buy you a greater number of shares when the market is low, putting you in a better position for your balance to recover when the market comes back up.

· DO step back and reassess your goals and timeframe.

When circumstances change, it’s time to reevaluate. Are your goals still realistic within your timeframe? Is it wise to perhaps look at the possibility of changing your timeframe?

Here’s a few things you should know to understand where you stand when your KiwiSaver balance drops.

In a higher risk fund, like a growth or an aggressive fund, you stand to reap a higher reward in the long-term. Key phrase here is long-term. If you’re looking at accessing your funds in say, 8 years, you can likely tolerate more risk in a growth option, because you have time to ride out the ups and downs. We just don’t know how long it will take, or how many ups and downs we’ll experience.

A lower risk fund, like a defensive or a conservative fund, has fewer fluctuations. It’s more about avoiding losses. The investments are not as risky, so your balance is relatively more stable. If you are planning on accessing your KiwiSaver funds in the next few years, you probably want your money to be invested in a less risky fund to avoid large fluctuations (and thus surprises).

Remember, you’re not the only one caught up in a crazy situation. By continuing to invest now you’re buying up in businesses whose shares have become cheap. As long as your fund matches your acceptable risk level and timeframe for meeting your goals, keep putting money in at the same rate. With KiwiSaver, you’re playing the long game.

Finally, if you’re trying to buy a home or retire soon, think about what ‘soon’ means for you, and whether or not your timeframe is flexible.

In sum, the right fund for you at this time is where you want to be. BetterSaver is here to make sure you’re there.

Enjoy the ride

We’ve all experienced the roller coaster that has been 2020, and it’s not over yet. No one could have foreseen a global viral pandemic. No one could have predicted the world would go into lockdown. Truth is, no one knows what the full impact of it is going to be.

As far as your KiwiSaver goes, the best thing you can do is secure your seat in the right fund for you. Having confidence that you’re in the right place means you can worry less about the ride. (It’s kind of like when you think you’re in line for the Ferris Wheel, but it turns out you’re actually getting on the Sky Scream – you want to make sure you know what you signed up for.)

At BetterSaver we are an independent team of financial professionals and analysts who want to help you save better. If you see your KiwiSaver balance dropping, we want to put your worries to rest. We provide clear trustworthy information about KiwiSaver so you can be confident in your choices. No one makes it easier than us to get it right.