STUFF / Connor Scott
Members of Financial Advice NZ joined Stuff to answer readers’ questions about their finances.
Simran Kaur is co-founder of Girls that Invest, which offers commentary on personal investment aimed at young people.
Question: I’ve recently moved to the UK, I’m wondering what would you recommend I do with regard to my KiwiSaver and investing?
I’ve been giving this a lot of thought, but am very stuck on what to do.
I’ve been thinking about investing for a while now and don’t want my UK adventure to set me back financially.
Answer: When we’re heading overseas, our KiwiSaver balance is usually the last thing on our minds. Future you just whispered “thank you”.
As borders open, many of us are getting ready to finally head out on that long-overdue OE, but it’s equally important to consider what this may mean for our future.
So what’s the right move? Should you throw your KiwiSaver to the side like a distant memory, or should you continue to invest as if you hadn’t left?
If you move overseas on an OE, without the intention of permanently residing overseas, you’ll probably not be interested in transferring your retirement fund overseas.
But we know the effects of compound interest work well when we are consistently investing, so what does one do?
Firstly, can you invest in your KiwiSaver when you’re on an OE?
The short answer is yes. You can put money into your KiwiSaver when you’re living overseas.
You can either do this via your KiwiSaver provider, which will often ask you to transfer the amount you’d like into its nominated bank account. You can also deposit money directly through the IRD.
With either method, the deposit(s) can be a one-off lump sum or regular contributions.
Will I get government benefits while I’m overseas?
Unfortunately, the government will not match the contributions you make while you’re overseas – you aren’t eligible for the member tax credit. In simple terms, you won’t get the $521 government bonus when you put $1042 into a KiwiSaver fund.
You may still wish to invest in KiwiSaver as a forced savings and investment habit, especially if you believe you’ll be coming back to New Zealand before long.
Should you continue investing with New Zealand-based investment platforms while overseas?
If you’re on an OE and plan to come back to New Zealand after a year or two, it probably doesn’t make sense to create new brokerage accounts overseas.
If you are a New Zealand resident, you can still sign up to New Zealand-based online investing platforms, as long as you have NZ identification such as your NZ passport or NZ driver’s licence.
If you already have a New Zealand brokerage account, can you still invest in it while living overseas?
It may depend on who you’ve been investing with in New Zealand, but the short answer is; usually yes. If you invest with online platforms, as long as you have a New Zealand bank account you can still continue to invest in them.
Some brokerage companies are multinationals and if they also operate in the UK you may be able to transfer your portfolio over.
It’s also worth finding out what your tax residency status is, as this can affect how you pay taxes on your shares in New Zealand.
It’s always best to get professional tax advice if you are unsure about your obligations.
What if you end up moving permanently to the UK?
There may be a chance that you decide to *gasp* not come back to New Zealand. What happens to your KiwiSaver?
If you’ve been living overseas (apart from in Australia) for a year, you can request to withdraw most of your KiwiSaver. This includes withdrawing your and your employers contributions, your $1000 kickstart if you had one, interest you’ve earned and any fee subsidies you’ve had.
You cannot take out the government contributions, however.
Now that you’re aware of your options, it’s worth considering what your long-term goals are and then working backwards.
This ensures that you’re setting yourself up well for the future, so that you can go back to enjoying the present.