Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

KiwiSaver Members Urged To Use Hardship Withdrawals As A Last Resort

KiwiSaver members under financial stress due to the effects of COVID-19 are urged to consider all forms of Government and bank support before resorting to withdrawing money from their retirement savings through hardship applications.

Retirement Commissioner Jane Wrightson said it was understandable that many KiwiSaver members facing financial hardship were turning to their funds as a potential source of short-term income, but there was a range of options they could consider first.

“While your circumstances may qualify for withdrawal under significant financial hardship, taking out money now may severely impact your quality of life in retirement later,” says Wrightson. “There is a lot of other help available you could access before going down that road.”

Her office, the Commission for Financial Capability (CFFC), is urging people to consider the following options:

“Avoid making a decision based on fear,” says Wrightson. “Emotional situations tend to lead to poor financial choices, so access the help above before turning to the long term savings and investment that is your KiwiSaver. You will not only crystallise the losses your fund has suffered since the effects of COVID-19 began, but also lose out on future returns.”

For example, a 35-year-old earning $80,000 who has contributed 3% to a KiwiSaver balanced fund since KiwiSaver started 13 years ago could have a fund worth $100,000. If they withdrew $30,000 now, they could have $47,000 less by the time they turn 65.

Members could make their own calculations using Sorted’s KiwiSaver Savings Calculator.

If, however, a KiwiSaver member decided they wanted to proceed with a significant financial hardship application, they would need to contact their provider. They need to provide evidence that they’re suffering significant financial hardship as a result of COVID-19, and there’s a process to go through. Some elements of the process may be simplified, such as the requirement to sign a form in front of an authorised witness (such as a Justice of the Peace or lawyer) to take into account self-isolation and level 4 lockdown requirements.

Liam Mason, the Director of Regulation at the Financial Markets Authority (FMA), said: ”We understand providers are focusing hard on helping their customers through these times of financial uncertainty. We’ve been talking to providers about they can approach KiwiSaver hardship withdrawals. We’ve advised providers and their supervisors to take a sensible and practical approach when they consider these applications. We also want providers to point out there are other forms of assistance available from the government, that people should look to first. Hardship withdrawals from KiwiSaver should always be a last resort, after other options have been exhausted.”

Wrightson also cautioned members to be careful if they were intending to use their KiwiSaver money to give to someone else, especially someone they had never met in person, as they may be the target of a scam or fraud.

For more information about hardship withdrawals:

https://www.kiwisaver.govt.nz/already/get-money/early/hardship/ks-hardship.html

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Commerce Commission: Warns Genesis Over Business Billing Errors

The Commerce Commission has issued a warning to Genesis Energy Limited about billing errors concerning electricity line charges to business customers. Genesis reported the errors to the Commission. The Commission considers that Genesis is likely to ... More>>

QV: Tax Changes Yet To Dampen Red-Hot Housing Market

Just over a month has passed since the Government announced measures aimed at dampening the rampant growth of the property market, and yet the latest QV House Price Index data shows the market hit a new high in April. The average value increased 8.9% nationally ... More>>

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>

The Conversation: Why Now Would Be A Good Time For The Reserve Bank Of New Zealand To Publish Stress Test Results For Individual Banks

Set against the backdrop of an economy healing from 2020’s annus horribilis , this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain. More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>