More than $157 million was pulled out of KiwiSaver through early withdrawals for financial hardship and home ownership reasons in June.
According to Inland Revenue, which tracks monthly KiwiSaver statistics, 6,580 KiwiSaver members withdrew a bit over $157 million during the month of June.
It's $25.4 million less than what was withdrawn in early KiwiSaver withdrawals during May, but $37.2 million more than early withdrawals in June 2023.
In June, 3,290 people withdrew $129.4 million for home ownership and 3,280 people withdrew $27.7 million because of financial hardship.
Home ownership withdrawals in June fell $20.5 million compared to May, while financial hardship withdrawals were down $5 million in the same period.
On a yearly basis however, first home withdrawals were up $29.6 million, and financial hardship withdrawals rose $9.6 million compared to June last year.
In recent research, the Retirement Commission says only 1% of members on average each year have withdrawn funds for first home deposits, but first home withdrawals can reduce the number of years that KiwiSaver final balances are expected to last by about 40%.
The latest Inland Revenue data shows KiwiSaver fund managers received $717.1 million in June, which is $134 million less than the $853.1 million received in May.
As of June 2024, there were 3,360,043 members enrolled in KiwiSaver with 4,850 new members joining that month.
By KiwiSaver scheme entry method, 660,257 members were in default allocated schemes, 214,360 were in employer nominated schemes and 2,474,872 had actively chosen their KiwiSaver scheme.
Across the age bands, the 25-34 category currently has the largest number of members with 743,602, followed by the 35-44 category which now has 702,348 members.
The number of non-active members – which Inland Revenue tracks through those who opt out of the scheme as well as those who close their accounts – came to 744,461 in June.
KiwiSaver funds under management (FUM) rose by $4.6 billion to $108.6 billion in the March 2024 quarter. Morningstar will report on the KiwiSaver June quarter in August.
According to Morningstar’s March quarter report, ANZ currently leads the KiwiSaver market with an 18.8% share and $20.4 billion in FUM.
Fisher Funds is in second place with a 15.4% market share and nearly $16.7 billion in FUM.
ASB, which was the second biggest KiwiSaver provider until it lost that spot to Fisher Funds last year, currently holds a 15.3% market share and $16.6 billion in FUM, according to Morningstar’s analysis.
4 Comments
Well not every kiwisaver can keep an income when in hardship and near half can be denied income support on the outset (would need to assert they are not in a partnership, have no emotional support connection with other people they may or often do not live with).
So yeah why die today when you can pull funds to survive to tomorrow and the tomorrow after tomorrow, maybe even afford that necessary medical procedure.
Plus housing is the most important investment in health, wellbeing (both in security & stability of housing, additional support for those housed, and the ability to make critical health improvements), and retirement (when any rent costs really bite and kick you out in the ditch). Which is all more forward thinking then a managed fund.
That the numbers of withdrawals are increasing for financial hardship after a major pandemic that has a virus still crippling people is no surprise... What is surprising is the complete lack of follow up income support for those with severe long term crippling illness when compared to those who had a 65th birthday party.
The trend for early withdrawals due to financial hardship seems to be going upwards, but shouldn't be a surprise or even be a cause for alarm considering the pressures in the economy atm. I certainly wouldn't be concerned about people taking funds to help with home ownership; afterall it's taking one future-focused asset class and transferring it to another.
While $27.7m sound like a lot, it's only an average of $8,500 pp. And if they're taking their $ to hold onto their home, they're, once again, doing so to hold onto a long term asset.
I don't think KiwiSaver withdrawals for first homes are "early" withdrawls. I withdrew mine last year for this purpose; it wasn't "early" because that was always what I intended to do with it. If anything, it was actually three years later than I wanted, because covid pushed up house prices so much.
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