The changes, which kicked in this month, affect the way KiwiSaver is taxed, with the government introducing the Employer Superannuation Contribution Tax.

As well as taxing employer contributions to the scheme for the first time, the government has also halved the maximum member tax credit per year from $1040 ($20 per week) to $520 ($10 per week).

Tower Investments chief executive Sam Stubbs said, “The on-going government subsidy is a lot lower than it was… it [KiwiSaver] will be a significant source of revenue over time as balances grow.”

He said the changes were a sensible step for a government that is trying to avoid the budget blow-outs and sovereign debt crises facing a number of other nations.

However, he said individual KiwiSaver members would have to re-calculate their contribution rates, due to the reduction in the taxpayer-funded subsidy meaning a reduction in the amount of money going into their accounts.

“We haven’t noticed any people withdrawing as a result of these changes, but it does mean KiwiSaver balances will grow slower.”

Stubbs said he didn’t think many KiwiSaver members were even aware of the changes or of the “magnitude of the subsidy” before they kicked in.

“What we now realise is that regardless of the subsidy [KiwiSaver] will be the de facto way Kiwis save.”

About 90% of New Zealanders’ savings outside of bank deposits are now flowing into KiwiSaver, he said.

“In hindsight KiwiSaver will be seen to be one of the most successful savings schemes anywhere in the world.”