New data shows 9520 early KiwiSaver withdrawals worth $243m in May, with first-home buyers accounting for $199m of that. The figures come as political parties roll out competing visions for the scheme's future.
New Zealanders withdrew more than $243 million from their KiwiSaver accounts in May — split between first-home purchases and financial hardship — as political parties continue to announce competing proposals for the scheme ahead of the election.
Of the 9520 total early withdrawals in May, 4420 were for first-home purchases and 5090 were for financial hardship. By value, first-home buyers withdrew $199.1 million compared with $43.9 million for hardship, according to Inland Revenue data reported by interest.co.nz. The May figure is lower than the March high of more than $296 million, but still near record levels.
The data arrives as the major parties lay out their KiwiSaver policies. National has proposed making the scheme compulsory, auto-enrolling babies at birth with a $1500 kickstart, and lifting combined contribution rates to 12 percent by 2032. New Zealand First wants contributions lifted to 10 percent and the scheme made compulsory from birth. The policies are overlapping but differ in detail and timing. The affordability debate around compulsion was covered by RNZ, with providers raising concerns about the impact on lower-income workers.
John Berry, chief executive of Pathfinder and a KiwiSaver provider, said the annual cycle of policy proposals was itself a problem. "Don't tinker with KiwiSaver year to year," he told interest.co.nz. "Have your settings and give people certainty, and help people understand what it's about and let them build trust in it." He called for a long-term strategy that was well-planned and well understood — a concern that speaks to the difficulty of building retirement savings behaviour when the rules appear to shift with each election cycle.
The scale of early withdrawals — both for first homes and hardship — reflects the dual role KiwiSaver plays in New Zealand's personal finance landscape. It is a retirement savings vehicle, but it is also one of the few mechanisms available for people to access accumulated savings before preservation age. The $243 million in May alone, against a backdrop of already-elevated housing costs and ongoing cost-of-living pressure, illustrates how tightly many households are managing their finances.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.