Figures released to Newstalk ZB show the amount of people taking money from their retirement fund for financial hardship reasons has increased dramatically from 200 in 2008 to more than 8000 in the last financial year.

Those aged between 35 and 44 were the most likely to withdraw, with 2,300 doing so last year.

The amount that can be withdrawn is limited to that which will alleviate the particular circumstances of hardship.

One Auckland man said he had exhausted all other options when he decided to withdraw money from his Kiwisaver because of financial hardship.

Graedon Parker had to prove how bad his situation was before he could withdraw money to try and raise cash for his new business.

"You had to prove that you had exhausted all other forms of loans, or credit cards, overdrafts, see statements of loans that I owed to my parents."

The New Zealand Federation of Family Budgeting Services said withdrawing money from Kiwisaver to pay bills should always be a last resort.

Budget services CEO Raewyn Fox said it's not something they advise their clients to do lightly.

"You're sacrificing your future. However sometimes the urgent issues are so pressing right now, that that's what has to happen."

Labour's commerce spokesperson Kris Faafoi said the increase is worrying and the government should take notice.

"They're more focused on spending $26 million on flags, when they should really be looking out for Kiwis who are struggling."

"These figures show that more and more are really struggling."

But Raewyn Fox doesn't think the increase means there's more people in financial trouble, just that more a seeing Kiwisaver withdrawal as an option.

"Nobody had significant values sitting in their Kiwisavers, so it wasn't worth withdrawing it."

"But once people started getting significant balances in there they saw it as an option when they struck financial hardship."

Commerce Minister Paul Goldsmith said the numbers filing for financial hardship are still very low, as a proportion of Kiwisaver.