More than 8700 early KiwiSaver withdrawals were made in August, with members taking out nearly $215 million.
These figures come at a time when retirement and KiwiSaver have been topical, with politicians either already sharing their party's plans for KiwiSaver contributions or indicating they'll be bringing a policy to next year's election.
In August, data from the Inland Revenue Department (IRD) shows KiwiSaver members made 8750 withdrawals totalling $214,673,363.
The IRD data also breaks down which withdrawals were made by people buying their first homes and/or those experiencing financial hardship. KiwiSaver members can withdraw funds under both categories within the same period.
About 4800 withdrawals were made because of financial hardship, totalling $42,524,652, and there were 3940 withdrawals for first homes totalling $172,148,711.
For the number of KiwiSaver fund withdrawals, IRD rounds up to the nearest 10.
August’s figures aren’t as high as previous months with July’s figures hitting a new monthly record of $234,851,774. July surpassed May, which saw a total of $234,192,710 in withdrawals.
People can withdraw money from their KiwiSaver when they reach 65, which is retirement age, but you can also apply for early withdrawals to buy your first house or because of financial hardship.
In August, there were 83,772 savings suspensions - this is when people temporarily stop their contributions. Of those, 1033 stopped their contributions due to financial hardship.
As of August, 802,150 members had their accounts closed or chose to opt out of KiwiSaver. Of this, 614,340 members had closed their accounts, while 187,810 chose to opt out.
Members usually have their accounts closed because of death, permanently leaving the country, retirement, serious illness or other reasons.
When it came to KiwiSaver scheme entry methods, 647,280 people were in default allocated schemes, 209,616 were in employer nominated schemes and 2,546,068 had actively chosen their schemes in August.
In August, the demographic with the largest number of KiwiSaver members saw a shift to the 35 to 44 age demographic. Usually the owner of this title is the 25 to 34 age category.
The 35 to 44 age demographic had 742,329 members followed by the 25 to 34 age category with 738,542 members.
During August 2822 people became active or provisional (you have eight weeks before you can choose to opt out) KiwiSaver members. There are a total of 3,411,930 active or provisional KiwiSaver members, IRD data shows.
KiwiSaver rules
Following this year’s Budget, changes were made to KiwiSaver.
People aged 16 and 17 are now eligible for KiwiSaver so they can access employer and government contributions.
The Government’s contribution rate has gone down to 25 cents for each dollar a member contributes. This was previously 50 cents for each dollar, which meant receiving a maximum government contribution of $521.43.
To get the government’s full contribution now, which is $260.72, people need to put in at least $1042.86 of their own money between July 1 to June 30 each year.
Alongside this, people with an income of more than $180,000 will no longer receive the government contribution.
Employer and employee contribution rates will increase to 3.5% from April 2026. This will move to 4% in April 2028. It’s currently at 3% - KiwiSaver members can choose to stay at the current 3% rate and still be matched at this rate by their employer.
Election
New Zealand First has already put forward a proposal on KiwiSaver with leader Winston Peters announcing a policy to make KiwiSaver compulsory and to increase employee and employer contributions to 10%.
At the party's annual conference in Palmerston North, Peters said KiwiSavers and employers would receive tax cuts to cover the increases.
Finance Minister Nicola Willis has said National will go into next year’s election with a superannuation and savings policy, while Labour finance spokesperson Barbara Edmonds said KiwiSaver was unfinished business for her party.
'Avoid the expectation that one-size-fits-all'
For most New Zealanders, a 5% KiwiSaver contribution rate would help them reach an 'adequate' retirement income but there’s no one-size-fits-all, retirement expert Ian Perera said.
In September, the Retirement Income Interest Group (RIIG) of the New Zealand Society of Actuaries released a report called Retirement saving: A framework for adequacy.
As RIIG convenor, Perera said targeting post-retirement income in relation to a proportion of pre-retirement incomes made the most sense in terms of how people could look at what’s adequate to them.
People should think about their retirement income needs in terms of what their current income needs are, Perera said.
He encouraged people to speak to financial advisers if they could or to try and use tools to help them understand where they’re likely to end up, allowing for things like NZ Super.
People need to avoid the expectation that one-size-fits-all when it comes to KiwiSaver contributions, he said, and avoid thinking that whatever the standard contribution rate is, is all they have to do.
“I think you definitely should be reviewing what’s going on, given your life circumstances.”
2 Comments
When the public sector is contracting spending and debt, the private sector has to borrow more or draw down savings to maintain its standard of living. That's from economist Steve Keene BTW. Not my observation but it is there in the historic economic data.
Not much to see there really. Of course early withdrawal amount will increase as the size of the funds increases. If I made a hardship withdrawal today it would be more than if I did it last year as I now have more to withdraw.
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