One area where NZ seems to differ to the UK and Canada at least is that income earners in the latter two jurisdictions have a choice between contributing to a government regulated 'investment scheme' or a government regulated 'pension scheme'.
https://www.moneysavingexpert.com/sa...lifetime-isas/
In the UK if you invest in a 'pension scheme', then at age 55 (rising to 58) you can only take out 25% of your pension scheme as a lump sum. The rest is paid to you as income and you pay tax at your marginal rate on that. Pension scheme contributions are made from pre-tax income. So with a pension scheme you do pay tax eventually but at normally at a lower rate because your income is lower in retirement. Furthermore employers are required to top up any employees pension scheme at a rate of 3% of salary.
However with the ISA which is more an 'investment scheme' your contributions are made after paying income tax. With the pension investment scheme ISA, the LISA, The maximum amount you can save per year is £4,000 (c.f. ten times that for a pension scheme). There is no top up from employers and you have to wait up to five years longer (at age 60) to access it. Why should you need to access your LISA early? You will have to pull money from your LISA before getting access to any pre-retirement age benefit entitlements. Having to do that could decimate your retirement savings.
Both schemes have a state contribution of 25% to top them up. However, if you have to access your LISA early this must be paid back. Higher-rate taxpayers get tax relief at 40% in a pension. So to contribute £100 only costs them £60 – easily beating a LISA.
Is that SBQ 'Pension vs LISA comparison, somewhat akin to the difference between the Canadian TFSA and RRSP?
It looks like the good old Kiwi taxpayer does have some advantage over the UK saver at least.
1/ Kiwisavers can take out all of their savings in a lump sum if they want to once they reach the qualifying age. There is no tax to pay at that point.
2/ No government subsides have to be paid back if the Kiwisaver is reclaimed early due to hardship.
3/ You can go on a benefit without being forced to withdraw your Kiwisaver.
4/ There is no limit to annual contributions
5/ No restrictions on Kiwisaver providers on markets they can invest in.
So really the average punter with a Kiwisaver account is not as badly off relatively as you make out?
SNOOPY