KiwiSaver hardship withdrawals spiked to a near-record high last month amid rising fuel prices and cost-of-living pressures for New Zealanders. 

According to the IRD, 5610 KiwiSaver members withdrew their savings due to financial hardship in March – the second-highest month since August 2016 (as far back as IRD’s available data goes). 

Last month’s figure, a 12.65% increase from March last year, was the second-highest number of hardship withdrawals in almost a decade – and likely in the history of the KiwiSaver scheme – with withdrawals peaking in December 2025 (6030). 

Number of KiwiSaver fund withdrawals by reason. Image / IRD 

Over $49 million was withdrawn from KiwiSaver by members experiencing financial hardship last month, up from $44.3m in March last year. 

It comes as the number of KiwiSaver hardship withdrawals has continued to climb in recent years, having outstripped first-home withdrawals in December 2023 and eclipsed that figure for every month since, except for June 2024. 

Hardship withdrawals first outstripped first-home withdrawals in April 2020, a month after New Zealand’s first nationwide Covid lockdown. 

“Hardship withdrawal applications are a reflection of the broader economy,” ANZ Investments general manager of funds management products Sian August said. 

“Like other KiwiSaver providers, the hardship applications we are seeing are being driven primarily by cost-of-living pressures and short‑term income disruption. Our customers who are seeking hardship support are spread across all age groups.” 

Amount of KiwiSaver funds withdrawn by reason. Image / IRD 

‘Robbing their future selves’ 

Henderson Budget Service chief executive Tracey Phillips, whose organisation provides budgeting solutions for Aucklanders in financial strife, said “more people than ever” are requesting help withdrawing their KiwiSaver because of financial hardship reasons. 

“We’re getting more people than ever coming in specifically asking us to help them withdraw from their KiwiSaver. 

“That used to be something that we used to suggest that people didn’t know about, but now everyone kind of knows about it and they make appointments specifically to say ‘I want to come in and withdraw some KiwiSaver’.” 

Phillips said the rise in KiwiSaver hardship withdrawals was “really scary” because people were “robbing their future selves”. 

“We don’t encourage that; we strongly feel that’s a last resort.” 

Budget advisers warn people are "robbing their future selves" to get by. Photo / 123rf 

Auckland Central Budgeting general manager Teresa White echoed similar sentiments. 

“We are already experiencing a cost-of-living crisis and the increased cost of fuel is compounding its impact. 

“Fuel prices don’t just affect transport, it also increases the cost of food and other necessities, which means that people are left to make impossible decisions. 

“We have seen increased inquiries for people wanting access to KiwiSaver for hardship reasons in recent years, and it is a tragedy that people are having to resort to depleting their retirement savings just [to] get by.” 

‘I didn’t have anywhere else to go’ 

Eilish Logan, 55, said she was forced to dip into her KiwiSaver after taking work off because of a medical condition. 

“I had six months off for a medical condition and in that six months I obviously didn’t have any income, and I found myself in a position where I wasn’t able to pay most of the bills that had accumulated. 

“I was in a bit of trouble and I couldn’t get any assistance, further assistance, than I was getting on the unemployment benefit. 

“The benefit is about $450 a week and trying to pay mortgage, rates, all of your utilities and eat week to week, it’s an absolute struggle. 

“I didn’t have anywhere else to go.” 

Logan, who has “30-40 years of experience” in administration, said she struggled to find a job since being forced to stop working. 

“I can’t believe that it’s this hard to get a job … I was just assuming that I’d have a couple of interviews and walk into a job. Didn’t happen like that at all. 

“You have to really dig deep and be really resourceful and resilient. And lots of positive affirmations as well to keep yourself buoyed while you’re looking for a job.” 

Logan said she may have to withdraw even more from her KiwiSaver if the job market and economic conditions didn’t improve. 

“I wouldn’t hesitate to do KiwiSaver again.” 

Withdrawing KiwiSaver for significant financial hardship 

IRD says to “contact your scheme provider for the correct form to complete to make a hardship withdrawal. You only need to apply to us if you’re within the first 2 months of your KiwiSaver membership”. 

To withdraw savings, applicants will need to provide evidence of “significant financial hardship”. 

If the application is accepted you can only withdraw your and your employer’s contributions. 

Significant financial hardship includes when you: 

• Cannot meet minimum living expenses. 
• Cannot pay the mortgage on the home you live in, and your mortgage provider is seeking to enforce the mortgage. 
• Need to modify your home to meet your special needs or those of a dependent family member. 
• Need to pay for medical treatment for yourself or a dependent family member. 
• have a serious illness. 
• Need to pay funeral costs of a dependent family member. 
• Need palliative care for a member or member’s dependant.