If you’re experiencing financial hardship because of the coronavirus impact, you might want to withdraw your KiwiSaver money. This is a serious decision to make, so we’ve got some information to help you make the right decision for you.
KiwiSaver should be a last resort
KiwiSaver money can only be taken out if you’re in serious financial hardship. This means that you can’t meet minimum living expenses, including rent or mortgage repayments, or you become seriously sick.
You’ll have to provide extensive details of your financial situation to your KiwiSaver provider. Your KiwiSaver money can’t be used to pay off debt, and you can’t withdraw it because you think you might have tough times coming up.
KiwiSaver is a long-term investment, designed to help you live well in retirement (though you can use it for your first home too).
It’s not a savings account. If you withdraw some, or all, of your KiwiSaver money for financial hardship, you could be short-changing your future self by thousands of dollars.
If you withdraw your KiwiSaver money during the coronavirus economic dip, you’ll be locking in your losses and your account won’t benefit when the markets ‘bounce back’.
Don’t make a panic decision
If you’re suffering from serious financial hardship, speak to experts first, and weigh up all your options.
A good first point of contact is Money Talks, the government’s free budgeting helpline. Then, if you’re having trouble paying your rent, speak to your landlord. If it’s your mortgage, speak to your bank or lender.
The government has announced relief packages for people experiencing hardship because of the coronavirus outbreak. Find out more about government help.
Using your KiwiSaver money for financial hardship is a serious decision and can impact your financial future by thousands of dollars. Speak to experts first, and explore all other options before making a KiwiSaver financial hardship application.
Published 1 April 2020
Pie Funds Management Limited is the issuer of the JUNO KiwiSaver Scheme. You can read our Product Disclosure Statement. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with an independent financial adviser. All content is correct at time of publication date.