Concerns KiwiSaver is being used as 'piggy bank' to solve financial woes
In April, 4220 people withdrew savings for financial hardship reasons, up from 3700 in April 2024.
Photo:
123rf
KiwiSaver is in danger of being considered a "piggy bank" to solve all of New Zealanders' financial woes, one provider says, and too many people are tapping into their savings on hardship grounds.
Founder of Kōura KiwiSaver scheme Rupert Carlyon was wary of calls for settings to be changed to allow people to use their [www.rnz.co.nz/national/programmes/checkpoint/audio/2018990661/calls-for-government-to-unlock-kiwisaver-to-buy-farms money to buy farms].
He said KiwiSaver was already being called on to solve the country's housing and infrastructure crises.
Carlyon said changing the rules to allow more withdrawals sent the wrong message to people, who should be using KiwiSaver for their retirement.
Instead, they were tapping into
KiwiSaver
in growing numbers.
In April, 4220 people withdrew savings for financial hardship reasons, up from 3700 in April 2024. They withdrew a combined $37.6 million.
"It encourages more and more people to think about it like a piggybank. It's scary what's happening in that space," he said.
He said he saw people making repeated hardship withdrawals, depleting their balance.
"People come back multiple times with the same claims… it's hard to figure out what's real and what's not."
He said it would now not be possible to close the "hardship loophole" because people expected it to be available and any change could dent confidence in the scheme.
But he said it should be tightened up so there was a limit on the number of withdrawals that could be made within a certain timeframe.
"The other part is it's very resource intensive. We spend on average up to six hours per financial hardship claim... It's hard on staff because they often have to say no when they want to say yes."
A spokesperson for Public Trust, one of the KiwiSaver supervisors, said people were not required to repay hardship withdrawals if it was found they were not necessary.
"Their future self might not thank them for dipping into their retirement savings. We see situations of real and urgent need… there are strict rules and checks in place to help ensure withdrawals are only approved for genuine financial hardship, and applicants need to sign a legal declaration confirming their situation.
"If someone doesn't use funds as intended, it could affect their ability to make another hardship withdrawal in the future."
Sign up for Ngā Pitopito Kōrero
,
a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RNZ News
8 hours ago
- RNZ News
Auckland department store Smith and Caughey's unveils final window display
Soon to close Auckland department store Smith & Caughey's has unveiled it's final Queen Street window display after 145 years. The curtains were pulled back at 3:30pm on Thursday, where a projector played a slideshow of images commemorating the iconic store's heritage and people. It accompanied another window display that was revealed on Wednesday, which reflects on Smith & Caughey's origins. Smith & Caughey's historical window display showing store's history. Photo: RNZ/Calvin Samuel Photo: RNZ/Calvin Samuel Photo: RNZ/Calvin Samuel About a dozen staff members came outside together to watch the display unveiling. Smith & Caughey's acting chief executive Matt Harray was approached by RNZ, but declined to comment. It comes as the department store's closing date was moved forward to 4pm Sunday, after originally being set to shut its doors on 31 July. "It is with a heavy heart that we announce our official closure, 4pm Sunday 15 June 2025. Until then, we welcome you instore for one last shop, a friendly chat and perhaps a shared memory or two," said Smith & Caughey's on social media. The post went on to say that the final Smith & Caughey's Queen Street window display, "shines a light on the rich history of our business, and our people". Photo: RNZ/Calvin Samuel The store had announced in May that it intended to close, with 98 staff being made redundant. Smith & Caughey's closed its Newmarket store last year and had reduced its Queen Street store to one floor. At the time, the company cited increased competition from new shopping malls, continued economic uncertainty and low consumer confidence and spending power has contributed to their closure. Smith & Caughey's also said many city office workers were continuing to work from home post-Covid. Photo: RNZ/Calvin Samuel They said the city centre has also faced significant disruption and change in the form of ongoing roadworks and the slow progress of CRL causing traffic congestion. The company said a large decline in foot traffic on Queen Street and an increase in parking costs had caused an impact, forcing the "heartbreaking" closure of the entire business. Photo: RNZ/Calvin Samuel "We are acutely aware that this has been a difficult and uncertain time for our staff and today's announcement is a deeply emotional one for all the team, our suppliers and our loyal customers," Harray said at the time in a statement. "Our intention has always been to address the business challenges so that Smith & Caughey's can continue. Every attempt has been made to achieve this and every feasible option investigated, no stone left unturned. "However, it's sadly clear it is no longer viable for us to keep the doors open." Photo: RNZ/Calvin Samuel Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
8 hours ago
- RNZ News
The Panel with Paula Penfold and Conor English Part 1
Tonight on The Panel, Wallace Chapman is joined by panellists Paula Penfold and Conor English Paula goes behind the scenes on her breakthorugh story this week about former Prime Minister staffer Michael Forbes; the nation's disaster monitoring centre is hit by funding cuts and The Finance Minister is being accused of opening a can of worms for considering giving farmers early access to their Kiwisavers. To embed this content on your own webpage, cut and paste the following: See terms of use.
RNZ News
9 hours ago
- RNZ News
Auckland department store Smith & Caughey's unveils final window display
Soon to close Auckland department store Smith & Caughey's has unveiled it's final Queen Street window display after 145 years. The curtains were pulled back at 3:30pm on Thursday, where a projector played a slideshow of images commemorating the iconic store's heritage and people. It accompanied another window display that was revealed on Wednesday, which reflects on Smith & Caughey's origins. Smith & Caughey's historical window display showing store's history. Photo: RNZ/Calvin Samuel Photo: RNZ/Calvin Samuel Photo: RNZ/Calvin Samuel About a dozen staff members came outside together to watch the display unveiling. Smith & Caughey's acting chief executive Matt Harray was approached by RNZ, but declined to comment. It comes as the department store's closing date was moved forward to 4pm Sunday, after originally being set to shut its doors on 31 July. "It is with a heavy heart that we announce our official closure, 4pm Sunday 15 June 2025. Until then, we welcome you instore for one last shop, a friendly chat and perhaps a shared memory or two," said Smith & Caughey's on social media. The post went on to say that the final Smith & Caughey's Queen Street window display, "shines a light on the rich history of our business, and our people". Photo: RNZ/Calvin Samuel The store had announced in May that it intended to close, with 98 staff being made redundant. Smith & Caughey's closed its Newmarket store last year and had reduced its Queen Street store to one floor. At the time, the company cited increased competition from new shopping malls, continued economic uncertainty and low consumer confidence and spending power has contributed to their closure. Smith & Caughey's also said many city office workers were continuing to work from home post-Covid. Photo: RNZ/Calvin Samuel They said the city centre has also faced significant disruption and change in the form of ongoing roadworks and the slow progress of CRL causing traffic congestion. The company said a large decline in foot traffic on Queen Street and an increase in parking costs had caused an impact, forcing the "heartbreaking" closure of the entire business. Photo: RNZ/Calvin Samuel "We are acutely aware that this has been a difficult and uncertain time for our staff and today's announcement is a deeply emotional one for all the team, our suppliers and our loyal customers," Harray said at the time in a statement. "Our intention has always been to address the business challenges so that Smith & Caughey's can continue. Every attempt has been made to achieve this and every feasible option investigated, no stone left unturned. "However, it's sadly clear it is no longer viable for us to keep the doors open." Photo: RNZ/Calvin Samuel Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
