Early KiwiSaver withdrawals hit almost $205 million during October, the highest monthly amount ever withdrawn in the history of the voluntary retirement savings scheme.
Between January and October 2024, 70,800 people have taken out over $1.65 billion from KiwiSaver in early withdrawals.
KiwiSaver was introduced by the Government in 2007 to help New Zealanders save for retirement. The scheme currently has 3.37 million enrolled members, according to Inland Revenue (IRD), which tracks monthly KiwiSaver statistics.
Almost 4,000 people enrolled in KiwiSaver during October.
People are generally only able to withdraw from their KiwiSaver when they reach the age of 65, which is the country’s current retirement age. However, people can apply for early KiwiSaver withdrawals on financial hardship and first home ownership grounds.
The previous monthly record for early KiwiSaver withdrawals was in July 2024 when over $191 million was withdrawn.
IRD reported a total of 8,450 KiwiSaver members withdrew $204.8 million during the month of October.
This was made up of 4,490 people withdrawing $166.4 million for their first homes and 3,960 people withdrawing $38.4 million for financial hardship reasons. Both the home ownership withdrawal and hardship withdrawals were new record high tallies.
Home ownership withdrawals in October jumped $25.5 million compared to a month earlier in September and financial hardship withdrawals were up $2.4 million compared to September as well.
Comparing October 2024 with October 2023, first home withdrawals were up $78.5 million from a year ago and financial hardship withdrawals had risen by $16.9 million in the same period.
When it comes to demographics, the latest data shows the 25-34 age category has the largest number of KiwiSaver members with 741,553, followed by the 35-44 category which currently has 714,377 members.
By KiwiSaver scheme entry method, 655,199 members were in default allocated schemes, 212,761 were in employer nominated schemes and 2,494,977 had actively chosen their KiwiSaver scheme.
IRD also tracks the number of non-active members, people who opt out of KiwiSaver as well as those who close their accounts. The total number of non-active members came to 762,779 in October which is 4,100 more than in September.
Payments to KiwiSaver providers came to $883 million in October, which is up 17% from September’s KiwiSaver provider payments of $754 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.
$117.6 billion
The latest quarterly KiwiSaver report out of investment research firm Morningstar report showed KiwiSaver funds under management (FUM) grew $6.8 billion to $117.6 billion during the September quarter.
According to Morningstar, the FUM increase was $3.3 billion more than during the June quarter when KiwiSaver funds rose by $3.5 billion.
Morningstar data director Greg Bunkall said multisector KiwiSaver funds had produced positive returns over the September quarter.
ANZ still continues to be the biggest KiwiSaver provider in the country and controls 18.5% or $21.8 billion of the market.
45 Comments
Thats fantastic news regarding new home ownership withdrawals increasing. Any increase in first home ownership purchase is great news. Kiwisaver is such a great way for young people to do savings to give them that initial foot in the door which otherwise they may not have. Well done to all the first home purchasers.
"This was made up of 4,490 people withdrawing $166.4 million for their first homes and 3,960 people withdrawing $38.4 million for financial hardship reasons. Both the home ownership withdrawal and hardship withdrawals were new record high tallies."
So just under half were withdrawing for financial hardship reasons....a very high bar to meet, and yet we have calls to not only make this compulsory but to also increase the rate of contribution.
Vested interest?
Absolutely nil vested interest except all my kids have used KS for first home purchases. Im not and never have been in a position to help them so it has been a blessing for them.. Just a glass half full kind of guy. I dont agree with KS becoming compulsory as at times in life one does need every cent one earns just to attempt to pay the bills.
I think it’s mostly the latter. Population twice the size of NZ, bigger economies of scale. Their organisations also appear to function much more efficiently and effectively than here too, generally speaking.
Not sure what their planning and building regulation is like.
That won’t make any difference. Very small apartments without balconies can already be built in Auckland, in the CBD and high density residential zones.
What could certainly help is Bishop’s standards-based approach ie. comply with Standards X, Y and Z then no need to go through an often excruciatingly subjective, time consuming and expensive consent process.
Yes but in the CBD land price becomes a factor (look at all the leaseholds where the land cost is astronomical). If you were allowed to build a shoe box apartment in suburbia (maybe say 5km from city) I reckon 250k might be possible. Is your nephew in the CBD?
The building code is already standards based isn’t it?
"Economies of scale" are effective when capital intensive start up costs are deferred over a high volume of production units allowing the consumer to enjoy a lower price. Not when profit maximisation for every unit is the pricing model used. In the latter case the savings which would have gone to benefit the customer are instead captured by the producer/manufacturer/property developer.
The point is to fund ones retirement though. I understand it helps people into a first home, but it feels like that withdraw option was a bandaid attempt at getting first home buyers off the then govts back, fast forward and it just exacerbates house prices (read: bank lending) and also undermines the retirement savings issue which is why KS was brought in to start.
In some ways yes, in others no. My guess is that a couple that left school at 18 and worked ever since would be close to a 20% deposit from KiwiSaver alone at about 30 (anyone have any stats on this?). And in most places in NZ buying a house costs about the same as renting. So buying a house is relatively easy with KiwiSaver?
No such thing as a business you can just walk away from in this country and have it run itself. Better to be able to run your own self employed business and not even have to rely on employees. I have now lived long enough to see the options, buying a house is the priority once you have the income stream.
just moved to a much lower fee provider from ASB -- fund is at the stage now where you are talking a 2-4 % or more extra needed in returns to justify the very expensive fees of most providers -- thinking som regulation especially on the default providers -- who are most certainly not providing much in terms of managed funds -- - huge holdings in mainstream firms - charging like wounded bulls
Returns after fees and tax are what to focus on… “low fee” providers can have more hidden fees with outsourced management and less efficient tax structures, both of which impact returns. I advise on KiwiSaver, get in touch if you like and I can discuss further josh@futurefunds.co.nz
As I said a while ago - I've withdrawn under hardship twice (years ago). I don't think it's hard to withdraw (other than the huge pile of paperwork you need to provide). BUT there are a lot of people who apply who simply don't know what real hardship is.
Not being able to afford your mortgage payments isn't hardship - especially when you will be given months, if not years, of grace before the banks take action AND you can sell down to improve your position. Different story entirely for a renter who can be turfed at 3 weeks' arrears.
I'll not deny such positions are stressful though. But stress ain't hardship.
I think the problem with KS is that people view it as a "retirement savings scheme", when in reality it appears that it's just being used simply as a "savings scheme" by many, given that people can withdraw their money early.
And what an amazing savings scheme it is if the govt pays you $500 for the first 1k invested annually! Where else will you get a 50% return on your money instantly, guaranteed? I am surprised not all Kiwis living in NZ (I realise Kiwis overseas can't get govt contribution) do not participate in this scheme or are even closing their accounts (unless the people closing their accounts are those who moved overseas?). KS sounds like a dream "investment" for your 1k invested annually.
Personally never had or need a KiwiSaver account.
I am a fan of Kiwi Saver as too many just do not know how to invest themselves even though the Kiwi Saver returns are not great in the long term on average.
Inflation does eat away at your balance continuously but if you are in it for a long time then you will have a good amount at retirement.
Housing investment done correctly in the right area is by far a better investment as you will have the capital gain plus the weekly rent so a double whammy.
However not everyone wants to be hands on and prefer to give money to someone else to invest.
The $500 given by the government is good for those that are not great savers or investors without doubt.
Not putting down Kiwi Saver at all, as it is required by so many.
I prefer the certainty of profit with bricks and mortar, that being housing investment.
The problem with Kiwi Saver for myself personally is that I have no input as to where or what my money would be invested into!
Reality is that at some stage there will be another Market Crash and balances will get decimated again.
Truth of the matter is that so many investments are grossly overvalued due to all the superannuation money worldwide going into them, I do not see this as being ideal and can not continue indefinitely!
Currently the profit is in buying well and improving.
No buying to rent out there is no profit in that and that is where the issues are!
Going to need to be increased rents for landlords to make it work, or they will just sell and beca shortage of rentals.
this thing about building more houses is just not going to work as if there is no profit then the builders will stop
Some great comments on property, you obviously know it well.
You have the ability to buy, reposition and sell property at a margin. Many don't. With a low yield "rent it out option" and the high capital outlay, it's a much higher risk profile now.
Since 2000, house prices have increased 7.2%p.a. on average. During this time house prices increased from 4x to 7.8x income, so I can't see the next 24 years house prices increasing by anything similar, or house to income ratio in 24 years would be 16x. If it did, interest rates would be very low and all asset prices would be through the roof.
So, for the large majority putting $1k into KiwiSaver each year and getting 50% tax free risk free return is compelling. Also, for employee's it is even more compelling to put in 3% of your income and pick up the employer contribution. It is possible to do better, but risk/reward and for the large majority, KiwiSaver is a winner.
There are now over 300 ways to invest your KiwiSaver and you can take some strong views with advice support... There are certainly better investments outside of KiwiSaver and it is far from perfect, but it's a great vehicle for most to build wealth.
Yes, I have invested interest, I advise people on KiwiSaver (and other investments). But it's a passion to help every day Kiwi's build wealth rather than my main source of income. I am very focused on getting great outcomes for people I work with.
For those interested, feel free to get in touch. Josh@futurefunds.co.nz
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