KiwiSaver hardship withdrawals have spiked to their highest in a decade last month, amid rising fuel prices.

According to the IRD, more than 5600 people withdrew their savings due to financial hardship - the second-highest amount ever since August 2016.

Over 49 million dollars was withdrawn, a 12.6 percent increase from March last year.

Simplicity chief economist Shamubeel Eaqub says the cost of living crisis, and the recent spike in job losses and business closures have all cumulated into the current increase.

"Mostly, what we're seeing at Simplicity is just that people have lost their jobs, they've lost their businesses, or they can't repay their mortgage - it's kind of life stuff. But the recession has real human cost." 

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• ‘Really scary’: KiwiSaver financial hardship withdrawals spike amid fuel crisis