Over 5000 KiwiSaver members withdrew their savings for hardship in May — but those navigating the process say the paperwork and lender negotiations themselves become an additional source of strain.
More than 5000 KiwiSaver members withdrew their savings due to financial hardship in May 2026 — continuing a trend that has seen application volumes double in just two years. But for those going through the process, the burden of the application itself can amplify the stress that prompted them to seek help in the first place.
Inland Revenue data shows 5090 members withdrew their savings due to financial hardship in May 2026, up from 4940 in May 2025, according to RNZ. The total withdrawn was $43.9 million, down slightly from $44.2 million a year earlier — meaning roughly the same dollar amount was spread across slightly more people, keeping the average withdrawal at between $8500 and $9000.
'Pretty overwhelming'
Hardship applications across the industry exceeded 58,000 in 2025 — double the number recorded two years prior. In the first five months of 2026, approximately 24,500 applications were received, compared to 22,000 for the same period last year.
Financial coach Shula Newland said the process remained onerous for many applicants. "There is some providers that go through Debtfix to process the applications and they are pretty strict about making people do hardship application on loans before doing KiwiSaver hardship. But the thing is when you are under lots of stress, doing a whole lot of hardship applications for lenders is pretty overwhelming. I know of someone that changed KiwiSaver providers, so that it was easier to get money."
Christine Liggins of Debtfix said she received 456 referrals from KiwiSaver providers in May 2026, up from 400 in May 2025. Of those, 221 became withdrawals, up from 123 the prior year.
Lenders are required to consider options for people facing unforeseen hardship before a KiwiSaver withdrawal can be approved — meaning applicants often must negotiate with their bank or lender first.
Calls to simplify access
Simplicity economist Shamubeel Eaqub said if KiwiSaver were made compulsory — as some political parties have proposed — the hardship withdrawal process would need to become considerably easier, according to RNZ. "We need to think about KiwiSaver not just as a retirement scheme but as a whole of life saving scheme which it already is. Then we would ensure the access to money for hardship is not nearly as torturous as it is today."
He pointed to Singapore's approach, where the Central Provident Fund allows withdrawals for health, education, and housing — a model he suggested could reduce the friction currently faced by New Zealanders in genuine financial difficulty.
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.