Finance Minister Michael Cullen said in a statement the number of New Zealanders saving for their future through KiwiSaver had passed 670,000, with more than 2300 new members signing up every day in May.
"KiwiSaver has shattered expectations from day one; 270,000 New Zealanders were expected to sign up after the scheme's first 12 months.
"Eleven months in, that number has been exceeded by over 400,000."
It was especially gratifying to see so many young New Zealanders starting a savings habit as a result of KiwiSaver, he said.
More than 180,000 KiwiSavers were under 25 years old, something no-one would have predicted a year ago, Dr Cullen said.
The ODT asked Dr Cullen's office for a more detailed breakdown of the figures after speculation among financial planners that people were opting into the scheme for the $1000 kick-start payment but making no further contribution.
That could have included children and students.
A spokesman for Dr Cullen said there were children under 18 who were in the scheme, something the finance minister personally supported.
"We've had a lot of anecdotal feedback about parents and grandparents signing up young children.
"Still, this is a relatively small number of overall members. You can see that hundreds of millions of dollars have been contributed to KiwiSaver schemes from members themselves."
Figures provided by Dr Cullen's office showed that at May 31, there were 673,942 KiwiSaver members.
Of those, 12% were under 18, 16% were aged between 18 and 24, 15.5% 25-34, 17% 35-44, 18% 45-54, 19% 55 and above and 2.5% provided no information.
Of the total, 51% were male, 48% were female and 1% provided no information.
Contributions by the Crown started to fall as a percentage in May compared with the year to date.
In May, the Crown paid 40% of total contributions compared with 55% in the year to date.
Members paid in more than $69 million during May to give $406 million in the year to date.
The Crown paid in $41.4 million in starter payments in May, $2.6 million in fee subsidies and $607,563 in interest for a total monthly contribution of nearly $45 million.
In the year to date, the Crown has contributed nearly $500 million.
Dr Cullen's spokesman said the finance minister was "absolutely confident" there was a net savings gain.
"The 244,000 people who had joined through automatic enrolment were more likely to be both lower and middle-income workers and new savers. The large percentage of workers under 25 were also likely to be new savers.
"As for a drain on the economy, given we are rolling out $10.6 billion in personal tax cuts - and that seemed to spook bank economists in the week after the budget - it's a good thing that we are also incentivising savings at a time when household debt and inflation are major concerns," the spokesman said.
Myles Wealth Creation director Craig Myles said when contacted there were signs that the trend towards a higher percentage of employee and employer contributions was continuing.
"In 12 months' time, that contribution outlook should look very different."
However, he was still concerned that the $480 million paid out in starter contributions so far this financial year was a lot of money that could have been available to other things like tax cuts.
There was also a cost associated with tax credits related to KiwiSaver.
