More than 50,000 people made withdrawals from their KiwiSaver accounts on the basis of hardship in the year to June - compared to about 18,000 five years ago.
KiwiSaver provider Simplicity chief economist Shamubeel Eaqub said the increase started in 2023 and the reasons were easy to understand - the recession and cost-of-living crisis were putting ongoing pressure on people's budgets.
"But some context - the number of hardship withdrawals were 1.6 percent members, and 0.3 percent of savings. The hardship, as is true for the wider society, is concentrated pain among a few," Eaqub said.
Sorted's personal finance lead Tom Hartmann told Nine to Noon, it was likely the ability to withdraw from KiwiSaver was giving people "peace of mind" that if their situation worsened they could draw on their savings.
He said the average withdrawal was $8800.
For someone in their 30s, earning $75,000 a year, a withdrawal of that size in a year could reduce their not-inflation-adjusted final balance by about $40,000.
Hartmann said there had not been an increase in savings suspensions, which indicated that the withdrawal was a temporary stop gap for people who would get back to making contributions.
People can opt to stop contributing to KiwiSaver for a year at a time, and can renew the suspension at the end of the 12 months.
The number of people on a savings suspension had dropped from 89,000 a year ago to 85,000.
Hartmann said the key thing for people considering a withdrawal was to make it a last resort.
"Typically there are other sources of support that need to be explored first."
Financial helpline MoneyTalks was one option, he said.
"The team there have reporting seeing an increase in even middle-income people exploring their options."
Eaqub said for people making a withdrawal, it was often a choice between "certain hardship today versus more savings later in life".
But he said the situation was worse for those without KiwiSaver.
"Many low-income people do not contribute to KiwiSaver, because the employee contribution lowers their take home pay. But they also miss out on the employer contribution and government subsidies. It means when non-contributors face hardship, they do not have this fallback."
But Rupert Carlyon, founder of Koura KiwiSaver, said people on lower incomes could build up good balances.
"Someone earning $60,000 contributing 3 percent will end be putting in [about] $3500 per year, so over 10 years plus returns that really adds up.
"You can easily see a $60,000 salary becoming a $45,000 balance over 10 years. That is the power of KiwiSaver, we are often encouraging people to save that would not otherwise do it."
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Poll: Should we be giving the green light to new mining projects? 💰🌲
The Environmental Protection Authority announced this week that a proposed mine in Central Otago (near Cromwell) is about to enter its fast-track assessment process. A final decision could come within six months, and if it’s approved, construction might start as early as mid-2026.
We want to know: Should mining projects like this move ahead?
Keen to dig deeper? Mike White has the scoop.
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53.1% Yes
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46.9% No
Aucklanders, we want to know: How are you feeling about the current property market?
New Zealand homeowners are now more likely to sell at a loss than at any time since 2013, and if you’re in Auckland or Wellington, the odds are even higher.
But there is a silver lining: buyers are still in a strong position when it comes to negotiating prices.
So we’re curious…
How are you feeling about the current property market?
If you’re keen to dive into the details, Deborah Morris breaks down all the latest insights.
‘Tis the season to not get scammed ...
As Christmas gift shopping moves increasingly online, scammers are ramping up their activity across the country.
Dunedin’s Investigation Support Unit is seeing more and more people fall victim to scams and other fraudulent activity, particularly on Facebook Marketplace.
There are a few ways to avoid the scams and keep yourself safe doing online trades this holiday season, says Southern District Service Delivery Manager Senior Sergeant Dalton.
🔒 “A good first step when looking to purchase something on Marketplace is to check when the seller’s Facebook profile was created. If it’s very recent, there is a higher risk that they have just created this account for a one-off fake item.”
🔒 Another important step is to make sure the seller’s profile name and bank account name match up. “We’re seeing a lot of scammers claiming their bank account name is different because it belongs to their partner or family member - that’s a huge red flag."
🔒 “When you’re selling, never trust a screenshot anyone sends you showing that payment has been made. Check your own bank account to make sure a payment has gone through."
🔒 “Quite frankly, it’s best for all parties to agree to pay, or be paid, for items in cash and in-person. Ideally in a public place with CCTV coverage."
🔒 "If you’re buying a car, check Carjam.co.nz to see if it’s stolen or if there’s money owed on it.”
A reminder: Suspicious activity can be reported on 105
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