Kiwis Withdrawing Kiwisaver As Fuel Prices & Cost-Of-Living Mounts

Added: 2026-05-22

[00:00:00]Which may be concerned about this, more Kiwis are turning to the Kiwi saver to survive mounting cost of living pressures. Hardship withdrawals jumped jumping to 49.2 million in March up from 41.2 in February. More than 5,600 people withdrew money due to hardship in March alone. Um, financial mentors are now seeing people struggle specifically uh because of surging fuel prices. And while January and February usually bring financial stress because of Christmas debt and back to school costs, uh the mentors are saying this year the pressure just keeps stacking up. Uh like I said, thanks to the fuel along with the onset of rising power bills.

[00:00:44]A worrying trend is that more people in full-time work, households with two incomes, are seeking help.

[00:00:52]Jake Lilley is FinCap's senior policy advisor and he joins me now. Jake, good afternoon.

[00:00:59]Good afternoon.

[00:01:00]Hardship Kiwi Saver withdrawals are climbing fast, Jake, jumping almost 20% in just 1 month. When someone comes to a financial mentor right now, what are the biggest pressures they're talking about?

[00:01:14]Well, always hard to say, always different, but um obviously fuel is on people's minds and as as you said in the intro there, we're expecting power to come too, but Yeah. you know, no matter what a financial problem is, there's there's um there's always a mix in there cuz your bank account going yesterday Oh, rent is awful. But you know, a lot [clears throat] of people rent's knocking out their entire income um if there's a couple and then trying to live off the other or or it's worse than that, you know, people just scramble to get the rental they can get.

[00:01:43]Yeah.

[00:01:43]>> Um when they're they're in that difficult place.

[00:01:46]>> Is it Is it fair to say, Jake, too, the timing couldn't be worse? I mean, there's no great timing to be struggling, but coming off Christmas debt and back to school costs.

[00:01:56]Yeah, I mean, this is this is a continuation of what's coming up half a decade now, isn't it? So Yeah. it's just one thing after another and you know just the financial mentors are just taking a deep breath. Um we've got our funding challenges.

[00:02:09]Since 2015 we've seen it's we calculated at least a thousand percent increase in these KiwiSaver hardship withdrawals.

[00:02:17]And it's one in eight people walking in the door of our financial mentor. Yeah, asking for for look I'm looking at my KiwiSaver. If they have a line up her later on, it's actually one in five people walking in the door.

[00:02:28]Um and and I think the other big step we have is surveyed the mentors and they're saying they're spending about 40% of their time trying to help people look at KiwiSaver, look at if there are other options.

[00:02:39]Yeah. Uh and and then see what might be made of it from there.

[00:02:44]One one thing that also really stood out to me, Jake, was that you were saying people um and I said in the intro, people you know, full-time work. You've got two you know, you've got couples with two incomes.

[00:02:56]And how common is it that that they're and you know, they're struggling?

[00:03:01]Yeah, it it has been creeping up in numbers over these years um that we've been tracking it. We've had good data for the last five years. Um it's still not the majority of people that turn up. Yeah. I think it's really noticeable to me financial mentors because you know, you can see being a financial mentor they're saying to you themselves that these people are getting caught up with life problems and and ending up in the state.

[00:03:27]You know, what hope do you have if you're not got two good incomes going?

[00:03:31]Yeah. You know, there's a very very small margin of error for a lot of people in terms of keeping afloat.

[00:03:37]I don't want to be total doom and gloom.

[00:03:39]You know, the help is there as here, financial mentors. And and if you are in this situation colleagues at MoneyTalks are a good place to start. You can you can find the website for all the different ways you can contact them.

[00:03:51]Um totally non-judgmental, totally free.

[00:03:54]Oh, that's uh actually that's interesting, Jake. You said non-judgmental because is there a sense of a little bit of I don't know, almost embarrassment from from from people that that will sh- not shame. I know shame's not the word, but you know, people think, "Oh, do I have to go and uh tell a complete stranger, you know, what I spend my money on or or how I got into this situation?" Is that Is that part of it?

[00:04:21]Yeah, I think there's, you know, a bit of taboo out there around talking about money, but um >> Yeah. people pay people maybe go a really long time not talking to someone taking the opportunity to find out there might be this whole other pathway of options you've got. Sometimes it is just saying the magic words to the right person at a call center and totally changes the track, so I think mentors are there.

[00:04:45]Yeah.

[00:04:45]>> Are there Sorry, there other pitfalls that you're seeing that people get themselves into? Um, I'm thinking about, you know, like the the rise of the buy now, pay later schemes. Are people increasingly using that almost like a survival tool?

[00:04:58]Absolutely. Yeah, buy now, pay later Yeah. mentors just say sort of tangled up in everything. And I think again, people really um hesitant to reach out to their buy now, pay later lender and say, "Hey, I'm having a bit of trouble here."

[00:05:11]Mhm. Because they just don't know what they'll do for the next emergency, but what mentors also told us is at the moment at least when they do reach out to those buy now, pay later providers, um when they're supporting people they can be really reasonable about repayment rates. So, again, financial mentors are there if you're not sure what the words are or how to make sense of the bank account and how it keeps hitting zero or or even worse.

[00:05:36]Um, Yeah. I should say as well, financial mentors are really challenged with funding. I just this week we've had um the Citizens Advice Bureaus in Wellington face a really big financial challenge, and they've got financial mentors. Um, I've heard of another one closing down and they got 250 people they were helping um, in the last few weeks.

[00:05:55]And um, we we're looking for funding, too. You know, um, we need to keep the doors open because it's going to be a long hangover from all these things and if you get money sorted, you're less likely to end up needing a doctor's visit down the track.