A finance expert is concerned about New Zealanders taking money out of Kiwisaver under financial hardship, saying it is a delicate balance.
The Financial Markets Authority (FMA) released Kiwisaver's annual report on Thursday which said there had been an increase in members enquiring about serious financial hardship withdrawals due to the financial impacts of the COVID-19 pandemic.
The report, which covered the year to the end of March, said serious financial hardship withdrawals totalled $111 million, up from $107.8 million the prior year.
David Boyle, the head of sales at Mint Asset Management, spoke to The AM Show on Friday about the report.
He said the real financial impact from the COVID-19 pandemic would have occured after the report concluded in March.
"That's right, a $100m, or thereabouts, was taken out because of hardship, and they were the [applications] that were successful," he said.
"But that was to the end of March so the cascade effect of those that have gone through redundancies or rationalisation of employers, also the subsidy is coming off in September, I suspect we will only be worse around the hardship requests."
Boyle said it is important to save for retirement, but Kiwis are doing it tough due to the pandemic.
"It's a tough one to balance out," he said.
But Boyle admitted there is "a lot of work" required for those who do decide to apply for a financial hardship withdrawal.
"The legislation is pretty prescribed around what's required: it is severe financial hardship. But ... the providers and the FMA have kind of helped to get the application through and in a more timely manner. Because if you have lost your job, and you don't have a chance to get another job soon, then you are in a position to really need that money."
