Outgoing National Party MP Andrew Bayly proposes raising Super age to 68 by 2065, one month each year from 2029 with early access for some

The age of superannuation should increase by one month each year from 2029, up to 68-years-old in 2065, former Minister Andrew Bayly says, along with a moderated or hybrid indexation, targeted early access for certain groups of people and compulsory, phased-in KiwiSaver. 

A paper named Pension problem is choice: the fiscal arithmetic of preserving universal superannuation, by Bayly, alongside Leonard Hong and Emmanuel Jo, both of the University of Auckland, was published last month in the International Review of Public Administration. The paper recommends a policy package to "preserve NZ Super as a universal public floor, while gradually increasing the role of funded household and public assets", along with a gradual implementation of compulsory KiwiSaver.

Bayly, who is leaving Parliament after this term, stressed the paper was done in his personal capacity not as a National Party MP. 

Raising the Super age

"Under this scenario, eligibility increases from 65 years and one month, starting in 2029, to 68 years and one month by 2065," the paper states. 

National’s policy at the last three elections has been to raise the age of superannuation - with its proposal to keep the NZ Super age at 65 until 2044 and then gradually lift to 67. ACT also supports lifting the age to 67. Prime Minister Christopher Luxon told media he still wants to raise it if National get a second term, but needed other parties on board. ACT also supports lifting the age to 67. 

The paper said a delayed increase to 67 lowered the projected cost of Super to 26.49% of core tax revenue, compared to 29.42% in 2026, but that was "insufficient as a standalone response". It predicted the monthly increase to 68 would decrease core tax revenue to 25.05% in 2026. 

Labour leader Chris Hipkins said in February there were questions for New Zealand about how superannuation is funded in the long-term, but raising the age of eligibility was not one of those questions.

Moderated or hybrid indexation

Bayly also proposed Super to be linked to inflation with "moderated indexation with, say, a statutory review after five years". A permanent CPI-only rule "could allow NZ Superannuation to fall too far behind wages," it said. 

The paper projected Consumers Price Index (CPI) indexation would have the largest direct savings "because it changes the growth path of every payment", and estimated it would lower Super to 5.38% of GDP and 19.24% of core tax revenue, if the age stayed at 65. 

Linked to wages, it suggested this would be 8.23% of GDP and 29.42% of tax revenue in 2065. 

Early access for some

Creating a "narrow, evidence-based early access pathway for people unable to remain in work until the general eligibility age," alongside the universal pension age was also looked at in the paper, based on work history, occupation, reduced capacity and medical evidence. 

"This would address the main equity objection to a later eligibility age without abandoning NZ Super's universal structure." 

It suggested it would be targeted to people with impaired work capacity, lower healthy life expectancy or long histories with physically demanding work.

Treasury

Treasury’s forecast from earlier this year suggested the number of people receiving superannuation in New Zealand will grow from 928,000 in 2024/2025 to 1,084,000 in 2029/2030. Treasury secretary and chief executive Iain Rennie said the growth was equivalent to the entire population of Tauranga in just four or five years.

“The extra superannuation in 2029/2030 of about $7.7 billion compared to 2024/2025 is equivalent to 22% of the growth in the entire tax revenue that we are projecting over that period.”