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A report by financial advisory service National Capital estimates nearly a million people are missing out on the government's annual contribution to KiwiSaver.
National Capital said about half a million people were not contributing anything to a KiwiSaver scheme, while another half million were not saving enough to qualify for annual government top-up of $521.
Director Clive Fernandes said it may be a small amount but would add up to a large sum after more than 40 years of compounded savings.
He said some people might find it difficult to save the minimum $1042 a year to qualify for the government top-up, but that worked out to just $20 a week.
"It is a sacrifice that you need to make now, but the pain that you undergo now by making that additional sacrifice is only a small percentage of the pain that you will in feel at retirement if you have not saved enough."
He said a lot of people did not have a KiwiSaver plan because they feared the government would tinker with the settings or raid the fund by the time they were ready for retirement, while others didn't know about the minimum requirement.
Fernandes said education was important, but the government also needed to build trust.
"What the government of the day needs to be doing is not tinker around with KiwiSaver a lot, because the more we tinker around with KiwiSaver at the edges, the more reasons we give to those people who don't trust KiwiSaver."
