Almost 90,000 people made early KiwiSaver withdrawals between January and December 2024, with more than $2 billion taken out of New Zealand’s retirement savings scheme during that period.
Approximately 88,390 people withdrew $2.07 billion from KiwiSaver for first home or financial hardship reasons, much higher than early KiwiSaver withdrawals made in the prior two years.
For example, 62,430 people withdrew $1.35 billion in early KiwiSaver withdrawals during 2023 and and in 2022, 48,420 people withdrew $1.08 billion in early KiwiSaver withdrawals.
KiwiSaver early withdrawals in 2024 were 52% higher than 2023 and 91.5% higher than 2022 withdrawal levels.
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, you can apply for early KiwiSaver withdrawals on financial hardship and first home ownership grounds. First home withdrawals take up the majority of the early withdrawals.
From the $2.07 billion withdrawn between January and December 2024, $1.66 billion was withdrawn by 40,980 people for first homes. Another 47,390 people withdrew $403.7 million due to financial hardship.
November 2024 set the new record for the largest amount of cash taken out of KiwiSaver’s coffers on a monthly basis with almost $222.2 million withdrawn. Early withdrawals were also high in December 2024 with $193.1 million taken out.
January 2024 was the only month last year where early withdrawals fell below $100 million, coming in at $97 million.
More people are relying on KiwiSaver for deposits for their first homes. The number of people making early KiwiSaver withdrawals because of financial hardship has also risen in recent years.
KiwiSaver funds under management (FUM) reached $117.6 billion in 2024.
As of December 2024, enrolled members were still sitting at the 3.3 million member mark, with 4,815 new members joining in the month of December.
Inland Revenue (IRD) is KiwiSaver’s central administrator and tracks KiwiSaver statistics. IRD also ensures KiwiSaver deductions from employers are passed onto member scheme providers.
The Government contributes 50 cents for every dollar a person contributes to their KiwiSaver, up to a maximum government contribution of $521.43.
To receive the full government contribution, KiwiSaver members must contribute at least $1,042.86 to their KiwiSaver between July 1 and June 30 each year.
By KiwiSaver fund type, 654,501 members were in default allocated schemes, 212,668 were in employer nominated schemes, and 2,503,731 had actively chosen their KiwiSaver scheme by the end of December 2024.
Across the age bands, the 25-34 category still has the largest number of members with 741,005, slightly less than 742,158 in January 2024.
This was followed by the 35-44 category which had 720,311 members by December 2024, up 5% from January 2024.
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 – reached 769,251 in December, up 8% from January 2024.
The number of non-active members grew by 57,450 between January and December 2024.
KiwiSaver account closures came to 581,371, up 11.6% from 520,516. Reasons for KiwiSaver account closures include death, permanent emigration, retirement and serious illness.
Commerce and Consumer Affairs Minister Andrew Bayly announced at the end of 2024 the Government would be rolling out new capital market rules allowing KiwiSaver providers to invest in private assets and “leverage” the billions currently sitting in KiwiSaver funds.
Bayly’s reasoning for this is because NZ’s “relatively shallow pools of capital” are hard on businesses trying to raise money for investment purposes. He wants to change KiwiSaver rules so KiwiSaver funds can be more easily invested in unlisted assets.
“Leveraging the money held in KiwiSaver to invest in unlisted assets, particularly domestic ones – such as transport projects, renewable energy generation or large- scale housing developments – would be a win-win,” Bayly said last year.
2 Comments
".....financial hardship and first home ownership grounds".
Unfortunately in NZ these are pretty much the same thing. We need housing affordability, not schemes to source funds that essentially place more hardship on the FHB stretching into their retirement years.
Sure. If you believe the financial industry's ability to extrapolate the past into the future. if you do, you're suggesting that we live in a 'planned economy' (which has been true to some extent). It surprises me that people seem to accept the machine is largely infallible. I'm not so sure it is
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