More than 7,500 people made early KiwiSaver withdrawals during the month of September, withdrawing over $176 million in the process.
It’s the fourth highest number of people choosing to withdraw money early from the voluntary retirement savings scheme so far in 2024.
A total of $176,762,381 was taken out in early withdrawals during September, with $140.8 million in first home withdrawals and $35.9 million in financial hardship withdrawals.
During September, 3,430 people made early withdrawals for home ownership reasons and 4,100 people because of financial hardship.
People are generally only able to withdraw from their KiwiSaver when they reach the age of 65 – the current retirement age in New Zealand.
However, people can apply for early KiwiSaver withdrawals on financial hardship and first home ownership grounds.
According to Inland Revenue's (IRD) September 2024 statistics, September’s total early withdrawal figure was $6.7 million lower than August's, but $55.1 million higher than early withdrawals in September 2023.
Inland Revenue (IRD) is KiwiSaver’s central administrator and tracks KiwiSaver statistics. IRD also ensures that KiwiSaver deductions from employers are passed onto member scheme providers.
Early KiwiSaver withdrawals reached an all-time high in July 2024 when over $191 million was taken out in early withdrawals.
The latest IRD data shows KiwiSaver fund managers received $754.4 million in September, with the Government’s KiwiSaver contributions contributing $1.7 million.
The Government contributes 50 cents for every dollar a person contributes to their KiwiSaver, up to a maximum government contribution of $521.43.
To get the full government contribution, people need to have contributed at least $1042.86 to their KiwiSaver between the 1st of July and 30th of June each year.
As of September 2024, there were 3.3 million members enrolled in KiwiSaver with 2,429 new members joining that month.
By KiwiSaver fund type, 656,212 members were in default allocated schemes, 213,094 were in employer nominated schemes, and 2,490,082 had actively chosen their KiwiSaver scheme.
Across the age bands, the 25-34 category still has the largest number of members with 741,830, slightly less than in August, followed by the 35-44 category which has 711,331 members.
The number of non-active members – which IRD tracks through those who opt out of the scheme as well as those who close their accounts – came to 759,377 in September, which is 4,466 less than in August.
The number of non-active members has grown by over 40,000 in 2024.
19 Comments
There is no point in KiwiSaver if this is allowed to happen. The whole point to KiwiSaver it that is most relevant people who cannot save. The secret is having the money in there for a long period of time to allow the compounding effect, not for it to be cleaned out at the first sign of difficulty.
The secret is having the money in there for a long period of time to allow the compounding effect
Well sure. But remember from the early 60s to 1980, the CAGR of the S&P500 adjusted for inflation was approximately -4.9% per year. Comparatively, the CAGR for gold of approximately 8.13% when adjusted for inflation.
You can't necessarily assume that Kiwisaver is the most appropriate vehicle for people.
@ Rastus - The housong ponzi? You don't want one? Would rather tent instead? Don't pretend housing isn't important just because your not an investor or big banker. Housing is actually most important to those who do not own a house themselves the most. It's no ponzi.
https://www.investor.gov/protect-your-investments/fraud/types-fraud/pon….
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk.
You would have to explain how this relates anything to property at all. It's much more likely you use socialist buzz words out of envy. Or do you really believe that when one sells their largest asset, they should always sell at a loss to "help the next generation out"? If so, Im sure that the next generation will look forward to buying your house cheap once you are finally done with it. I'm sure your children won't thank you for leaving no legacy behind, but someone else's children will for giving such a generous discount.
Real estate creates revenue. All governments know that regardless of which one you support. It is irrelevant how you feel about it. Facts over feelings.
A total of $176,762,381 was taken out in early withdrawals during September, with $140.8 million in first home withdrawals and $35.9 million in financial hardship withdrawals.
One group is raiding tomorrow to have it today, the other because their FOMO driven decision of yesteryear to be owner occupiers has lead to a financial and emotional nightmare today.
This is exactly why I say there need be no hurry to buy.
@ Retired Poppy - Morally bankrupt is expecting it is your landlords job to financially assist you into a home.
Morally bankrupt is expecting to rent free in someone else's home.
Morally bankrupt is expecting to get away with damaging someone else's home
Morally bankrupt is expecting to not have to put in any effort at all to achieve the largest purchase that one will likely ever have to make, and instead expecting others to do it for them for free
Morally bankrupt is tall poppy syndrome putting other achievers down for something you have failed yourself to achieve in order to justify one's current position
Yes, Morally bankrupt does best describe it. It's not entirely your fault however. Some blame lies at the feet of those who sold you the lie, that success & ownership can be achieved through unlimited smiles, kindness mantras & taxing ourselves to financial prosperity. You, like many, were decieved. So some blame is to be rightly put at the feet of those. The rest is up to you, not your "greedy landlord", not your "greedy boss", not your "greedy parents", not your "greedy peers". The buck stops with you.
@ Retired Poppy - So you advocate for a "renter for life" lifestyle? Certainly sounds that way with your bleak outlook of the day and the life of a super stressed out home ownner. Who would want to own a home after hearing your doom and gloom. Just rent for life, give hundreds of thousands to your landlord coz it's just easier and less scary and stressful than way aye?
One minute your on here talking down about all those "greedy landlords", next minute you sound just like one. Do yiu even own your own home Reitred Poppy? Or is this just more disgruntled renters talk, justifying a series of poor financial life choices?
It’s really not that bad. Most landlords are happy to leave good tenants alone long term. And so what if you have to move once in a while? Our species were nomadic for most of history/prehistory; we’re totally psychologically equipped to handle it (except for the most neurotic people). Living in negative equity with no retirement savings, on the other hand.
Doesn't matter how good of a tenant you are if your landlord decides to sell up and needs you out. Nobody has done anything wrong in that situation but it does throw an absolute wrench into your life and adds a bunch of stress.
And the fact we used to be nomadic has no bearing on modern life. Finding a new rental can be an absolute ballache especially in regions with rental shortages. Not so bad if you're single and flatting but add a family, kids and pets into that and it can be a pretty rough spot to be in. Hard to put a price on the peace of mind that you and your family aren't going to have your whole life uprooted with very little notice.
@E46 - "Doesn't matter how good of a tenant you are if your landlord decides to sell up and needs you out."
Why ever would you expect stability as a tenant? That's like expecting your boss will always keep you and the business around. Plans change. This is one of the many benefits of striving towards home ownership - stability of location. Everyone jumps straight to financial motivation, but they forget that the ability to decide when the house sells, and to be in control of that, is incredibly important.
For those tenants that enjoy stability of location, the idea that a landlord may still sell up in the back of their mind should absolutely be a good motivator to do what's required towards home ownership. If anything, a little fire under a tenants feet to keep them from getting too complacent in someone elses home and instead gets them moving steps closer towards eventual home ownership is probably a good thing.
"Hard to put a price on the peace of mind that you and your family aren't going to have your whole life uprooted with very little notice."
Exactly why you do what's required to strive towards home ownership. There are multiple ways to achieve this. Yes it's hard. Why ever would it not be? The largest purchase one is likely to make will absolutely take the largest sacrafice one has ever likely had to make to get there as well. At least in a financial sense. The thirst for what you want, must be greater than what stands in the way to get it.
No it's not impossible. No you don't need a million dollar property in the middle of Auckland where it's all going down. No you don't need a new place with minimum double glazing and double garage with 3 bathrooms and a massive backyard. No you don't need to buy in the middle of no where in order to own. No you don't need 20% deposit. No you don't need dual triple digit incomes. No you don't need to be completely debt free in order to buy, although this does help. No you don't need a minimum deposit size of 200k. No you don't need to save for 20+ years just for the deposit. No you dont need rich parents or parents to go garantor. No you don't need to be a boomer having brought 50 years ago. No you don't have to wait for the next "opportune moment" to time the market just right to buy.
When the complaining that it's everyone else's fault stops, and the research into how it's possible starts, it's amazing what can actually be achieved.
@ Hamish - Why ever would you expect it The other way around? The tenant doesn't own the house, they don't make the rules. Should kids also be allowed to tell parents what to do in their own homes as well? What you advocate for is entitlement, where a tenant has more rights to a home they don't own, than the owner themselves.
You also forget that rights come with responsibility. It is the right that a tenant is housed. It is a responsibility that they are to pay rent for such a service, given that they have failed to house themselves. It is a responsibility that the tenant look after the landlords home, causes no damage, disturbs no peace of neibours. If one does not provide for themselves, they will pay a high price to have someone else do it for them.
"Whatever the landlord feels like doing". That's tenant language if ever I hear it. Not very clued up with the property market are you Hamish. A landlord cannot do "whatever they feel like doing". They are bound by the residential properties act. If landlords are found to be operating outside those laws, tenants can report them.
Your comment comes from a landlord bring able to do more than their tenant, and this would be absolutely correct, and absolutely justified. It's their property, naturally, they should have more rights to it than someone who rents it. Who ever told you you could reign over someone else's property just because you were special?
Don't like the "landlord doing whatever they want"? Do what's required to achieve home ownership. He who owns the gold, makes the rules. Don't like the rules? Do what's required to buy the gold, and make your own rules. As a tenant you don't get to make the rules, you only get to play by the rules written by someone else.
@ Retired Poppy -
There is no tomorrow if one cannot fund today.
For many, the ability to use Kiwisaver for financial hardship is a life saver. Its not like a bank account where you can just go to an atm and withdrawal it, there's a very lengthy process one has to prove under heavy scrutiny that they absolutely require this as their last resort. Plenty of people get denied for early Kiwisaver withdrawal.
As for those who use it to buy their own home - you'll find that a home is most people's retirement savings. Not even the boomers, who came well before Kiwisaver, have enough savings to live a comfortable retirement. The current generation using their kiwisaver to bridge the gap between owning & renting are doing exactly the same as past generations - They realize that saving alone won't get them a comfortable retirement, so they, like all generations before them, are relying solely on selling their home to fund their retirement. Therefore using kiwisaver to bridge that gap is justified.
Lol You've been saying no hurry to buy for decades haven't you Retired Poppy. It's a waiting game aye? Waiting for another 1920s property crash "all the way to the bottom". Your logic - just wait another 5 years to buy, whilst paying $600+ a week to your landlord. Who cares if you waste $168,000 on rent over 5 years right? It'll all be worth it once property market crashes like 1920s, you'll be able to pick up properties dirt cheap again right? That's some smart financial advice right there - keep paying your landlord hundreds of thousands over years while you time the market and wait for the exact "right" time to buy.
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