Half of all KiwiSaver hardship withdrawals may be able to be avoided, research says

Résumé détaillé

It should not be made harder to withdraw money from KiwiSaver, but people need support to look at other options, a new report says.

It should not be made harder to withdraw money from KiwiSaver, but people need support to look at other options, a new report says.

Victoria Stace, senior lecturer in Victoria University faculty of law, was asked by Fincap, the network supporting financial mentors, to look at ways that people who might be considering a hardship withdrawal could be helped to keep their money in KiwiSaver.

Total hardship withdrawals have increased from $65 million in 2016 to $443.6m in 2025.

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Stace noted that although hardship withdrawals could provide necessary short-term relief, a withdrawal reduced the money that was available for people in their retirement and could increase their reliance on NZ Super.

"The sharp increase in withdrawals therefore raises questions about whether more can be done to support members experiencing financial hardship while preserving retirement savings where possible."

She said KiwiSaver hardship withdrawals were a symptom of financial stress that people were under.

"We think the current threshold has been set to make it relatively hard to get your money out of KiwiSaver and the system is working as it should. It's just there are more people in extreme need which is why there are more withdrawal applications now."

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