New Zealanders pulled $244 million out of KiwiSaver in June, with first home buyers taking the bulk

New Zealanders took $244.3 million out of their KiwiSaver accounts early in June, the great majority of it going towards a first home deposit, according to figures published by Inland Revenue on 24 July.

Of that, $200.9 million was withdrawn for first home purchases and $43.4 million was taken out on the grounds of significant financial hardship. Both are well up on the same month a year earlier, when the two categories came to $155.3 million and $36.5 million. The combined figure is up 27 percent in a year.

The number of people involved tells a rather different story to the dollars. Inland Revenue’s count of withdrawals shows 4,370 members took money out for a first home in June, up from 3,620 in June 2025. But 5,130 members took money out because they were in financial hardship, up from 4,080 a year earlier. More New Zealanders emptied part of their retirement savings to get through the month than did so to buy a house.

The difference is in the size of the payouts. The average first home withdrawal in June worked out at about $46,000, up from roughly $42,900 a year earlier. The average hardship withdrawal was about $8,500, and that figure has actually gone backwards, from about $8,950 in June 2025. People in trouble are taking out smaller amounts, but a lot more of them are doing it. Hardship withdrawals were up 26 percent by number and 19 percent by value over the year.

June was not a record month. Early withdrawals peaked at more than $296 million in March and ran to $243 million in May, as interest.co.nz reported. What stands out is how steadily the trend has held through the first half of the year rather than any single month.

The first home side of the ledger is the easier one to read. First home buyers have been the most active group in the housing market all year, picking up property while investors and movers sit out a slow patch. Prices in most centres have gone sideways, banks are competing hard for new borrowers, and there is more stock on the market than buyers. For someone who has been saving in KiwiSaver for a decade, this is the moment the balance gets spent.

The hardship side is harder to explain away. A hardship withdrawal is not something a member can simply request. The application goes to the scheme’s supervisor, it needs evidence of an inability to meet minimum living expenses or of a mortgage default, medical or funeral costs, and the supervisor decides both whether to approve it and how much to release. Government contributions cannot be taken out at all. Every one of those 5,130 approvals in June represents a household that filled in the paperwork, proved it was struggling and had a third party agree.

The pressure is not hard to find. Petrol is back at $3 a litre for 91 octane after the renewed conflict in the Middle East pushed Brent crude back above US$96 a barrel, according to RNZ. Fixed mortgage rates are set to rise again as wholesale rates climb. The one genuinely encouraging number of the past week was job ads, which climbed 10.7 percent to a two-year high, led by construction and the regions. Hiring intentions turn into wages slowly, though, and hardship withdrawals are a lagging measure of a slow patch, not a live one.

Meanwhile the scheme itself keeps growing. Inland Revenue counts 3,468,257 active and provisional members, with 6,908 people joining in June. Just under 84,000 members are on a savings suspension, though only 1,161 of those suspensions were granted on hardship grounds, the rest being ordinary breaks from contributing. KiwiSaver was set up in 2007 to lift a household savings rate judged structurally too low, and it now reaches most of the working population.

The rules underneath all of this changed in April. The default employee and employer contribution rate rose from 3 percent to 3.5 percent on 1 April 2026 and is legislated to go to 4 percent on 1 April 2028, while the annual government contribution was halved to a maximum of $260.72 and cut off entirely above $180,000 of income, as set out in Budget 2025. Members who cannot manage the higher rate can temporarily drop back to 3 percent and still be matched. More money is going in each payday for most people, and more is coming out early at the same time.

Further changes are queued up. The Government has said it will introduce a bill allowing first farm purchases and service tenancy workers to use the first home withdrawal, with the details set out by MBIE. Those rules are not law yet and would take effect well after the November election.

That constant adjustment is what worried the previous Retirement Commissioner. Speaking to interest.co.nz in April, shortly before leaving the job, Jane Wrightson said “I’ve been a bit voluble about tinkering in the last couple of months as I’m going out the door”, and argued that KiwiSaver and New Zealand Superannuation need to be looked at together rather than separately. “The worst thing we can do is look at NZ Super all by itself and KiwiSaver all by itself,” she said. Her successor, former Fisher Funds KiwiSaver general manager David Boyle, started a three-year term on 18 May and inherits the question.

One caveat on the numbers. Inland Revenue’s monthly data covers only the withdrawals reported by scheme providers, so it leaves out retirement withdrawals and some other categories, and a member can appear in both the first home and hardship columns in the same period. The monthly series is a good guide to direction rather than a full accounting of every dollar leaving the scheme.

What it does show clearly enough is a scheme doing two jobs at once. For 4,370 households in June it was the deposit that finally got them a front door key. For 5,130 others it was the money of last resort. If you want to know what your own balance is likely to do over the next twenty years, our guide to growing your KiwiSaver has a simulator built on the current rules.

Have you taken money out of KiwiSaver this year, for a first home or because you had to? Tell us in the comments below.

This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂