KiwiSaver withdrawals hit an eight-year high this March as resurgent first-home drawdowns and record financial hardship exits saw providers pay-out almost $173 million.
According to the latest Inland Revenue Department (IRD) statistics, the March 2024 first home/financial hardship withdrawal figure exceeds the previous peak of close to $172 million set in the same month three years ago.
Hardship claims have been trending up over the last year or so to land at a new high-point of $29.2 million this March.
First-home withdrawals – subdued in recent times – soared almost $40 million month-on-month to reach more than $143 million, still shy of the almost $160 million house-deposit top-up splurge by KiwiSaver members in March 2021.
Despite the spike in hardship withdrawals, possibly an indicator of tougher financial conditions, the number of KiwiSaver members on contribution holidays dipped slightly again in March to 86,300 – or almost 20,000 fewer than 12 months previously.
But other IRD stats suggest KiwiSaver providers are starting to see leaks sprouting elsewhere, too, as withdrawal numbers are rising for both retirement and permanent emigration purposes.
From 2017 until the end of June 2022, roughly 2,000 members cashed-out of KiwiSaver each year to head offshore with the number doubling to 4,000 for the 12 months to June 30, 2023: over the 12-month period to the end of this March more than 6,500 members have left schemes to emigrate.
Similarly, retirement age KiwiSaver withdrawals have headed upwards from an annual average of about 20,000 until the 2021/22 year to 33,000 over the 12 months to the end of June, 2023. The most recent monthly IRD figures show approximately 35,000 KiwiSaver members closed their accounts to retire for the 12-month period ending March 31 this year.
Providers continue to see healthy annual flows, though, as employee, employer and government contributions for the 12 months to the end of March totalled more than $10.3 billion compared to $9.8 billion for the 12-month period ending June 30 last year.
However, the March 2024 joint contribution figure of about $746 million was down almost $80 million on the same month in 2023.
The IRD data also shows member transfer numbers rose to 13,000 in March to bring the 12-month total to 134,000 – still relatively soft compared to the decade-long average but considerably above the 10-year low of 121,430 transfers recorded during the 12 months to the end of last June.