Costly KiwiSaver missing its target

The report, which used data from a national survey of 825 people by market research firm Colmar Brunton for the IRD, assessed whether KiwiSaver had helped its target population, defined as "those who would not otherwise have saved enough to maintain their standard of living in retirement."

It found a high amount of "leakage", with the proportion of KiwiSaver members outside the target population estimated to be as high as 93%.

Meanwhile, KiwiSaver only appears to reach one third of the target population, and at high cost, the report said.

"With ongoing costs of the scheme for salary and wage earners projected to total around $823 million for the 2011/12 year, the costs for each member of the target population may exceed $13,000 per year."