More than half of would-be applicants for KiwiSaver hardship withdrawals to Simplicity, Milford, SuperLife and NZ Funds are being directed to other ways to deal with their problems instead.
KiwiSaver hardship withdrawal numbers have increased rapidly in recent years. In July 2026, $45.2 million was withdrawn for hardship reasons, up from $43.2m in July 2025.
Some providers have engaged third-party providers to help manage the workload that comes with the applications, such as Debtfix.
In a new report, Debtfix said in the year to March 2026, it received 5964 referrals to it from the KiwiSaver schemes it works with, of people who were seeking money from their KiwiSaver accounts for hardship reasons.
Of those, 2516 went on to be approved for a hardship withdrawal. Another 3450, or 57.9 percent, were supported through other solutions to the problem.
Debtfix said accessing KiwiSaver was not always the most appropriate or sustainable solution.
Alternatives could include applying to creditors for hardship arrangements, negotiating debt repayment plans, no asset procedures or budget and cash flow planning.
Applicants for KiwiSaver withdrawal are meant to have exhausted their other options.
Simplicity chief economist Shamubeel Eaqub.
Supplied
Simplicity chief economist Shamubeel Eaqub said people had sometimes not considered the alternatives before putting in an application.
The country’s biggest KiwiSaver provider, ANZ, said it saw supporting KiwiSaver members through difficult economic times as part of its role.
“When people reach out to us because they’re under financial pressure, our focus is on understanding their circumstances, helping them explore the options available, and providing support through what can often be a very stressful time. We also support members through the hardship withdrawal process itself and can assist them with their application.
“Between December 2025 and July 2026, our KiwiSaver Contact Centre received almost double the number of contacts relating to financial hardship as actual hardship withdrawals. These included enquiries about existing applications, the hardship withdrawal process, and eligibility requirements.
“We would note that because many of our KiwiSaver customers contact us more than once and enquiries cover a wide range of topics, these figures can’t be viewed as indicating the proportion of customers who ultimately make a withdrawal.”
ANZ’s spokesperson said the bank shared the view that KiwiSaver hardship applications should only be made after all reasonable alternatives had been exhausted.
“Applicants need to demonstrate they have explored other reasonable avenues of support, which may include using available savings, cashing in investments or shares, seeking assistance from their bank, or approaching WINZ for support.”
Debtfix said people were increasing seeking assistance not because of their own financial decisions, but because they had run out of resources to help them cope with increasing costs.
Loss of employment or reduced work hours were some of the most common reasons people wanted help.
It said there were more people experiencing sustained periods of hardship, rather than isolated financial events.
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