logo
Hardship forces Kiwis to withdraw $470 million from KiwiSaver in 12 months

Hardship forces Kiwis to withdraw $470 million from KiwiSaver in 12 months

NZ Herald6 days ago
'That trend really started a couple of years ago, so we've been seeing that since early 2023. And that really coincides with that period of economic hardship.
'Initially it was about cost of living, when inflation rose very sharply… then of course the recession - when we've seen quite a big set of job losses and that wider hardship.
'[Hardships] used to be under about 2000 a month and we've been closer to 4500 a month in the last little while, so [that] gives you a sense of just how much hardship there is.'
Eaqub said redundancies were the biggest driver of hardship in the past year.
'There's a bunch of reasons, but really it's about that big increase in job losses over the course of the last couple of years.
'While the overall rate of inflation has slowed, the cost of living is still really high. So, what we've seen is the rate of growth… costs are not increasing as fast as before but they're still very expensive. Particularly for things like food.
'Food prices are up around 4.5% [in the last year], people's incomes are not rising that fast.'
Eaqub called it a 'double whammy'.
'When the economic conditions are weak, it tends to affect people in more than one way.
'It's around 0.3% of all KiwiSaver members. So, it's gone up a lot since the pre-Covid years when it was 0.2%.
'It's a small number of people who are experiencing a lot of hardship.'
He said the average amount withdrawn is about $9000.
'[People] are taking out what they can to cover their outstanding debts and making sure they've got money left over,' Eaqub said.
Eaqub said this can have implications on retirement savings later in life.
'I guess it's choosing between financial hardship today versus financial hardship potentially later. And that's the trade-off that you have to make.
'If you're in hardship today, then it is no good saying that in 20 or 30 years time I'm going to have a better retirement if you're living in poverty today.
'Quite often we're talking about people who have relatively small balances.'
Those contributing to KiwiSaver were also better insulated for when hardship hits.
'Quite often the people who don't [contribute] are on low incomes. And for them they are missing out on the employee contributions, the Government contribution.
'Those people who have been contributing to KiwiSaver are better off in the sense that, at least they have these pre-cautionary savings and they've saved a lot more income they might have otherwise had.
'So, they may not have more money in retirement but they will at least have more money in hardship today.'
Cameron Smith is an Auckland-based business reporter. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Govt making thousands more building products available for NZ use
Govt making thousands more building products available for NZ use

1News

time24 minutes ago

  • 1News

Govt making thousands more building products available for NZ use

The Government has opened the door for many building products from overseas to become available in New Zealand, including cladding systems, external doors, plasterboard, and windows. Building and Construction Minister Chris Penk said products had been given "the green light" for use in New Zealand to end what he called "costly monopolies" on select products. "These changes have the potential to reduce total building costs by thousands of dollars when building a home." Penk said it was "frankly outrageous" how much it cost to build a house in New Zealand. "It is 50% more expensive to build a standalone home in New Zealand than in Australia." ADVERTISEMENT He said there were thousands of well-made, high-performing products that had been tested against international standards but had faced barriers here because they had not been tested against New Zealand standards. "This Government is serious about lowering the cost of building and helping Kiwis into homes faster." Prime Minister Christopher Luxon said it would provide "much needed" competition, lowering the cost of building and subsequently the cost of living. "We want to level the playing field by increasing competition for high quality buildings products, and in turn, lower prices for builders, which leads to lowering the cost of living and making houses more affordable for Kiwis." The first version of the building product specifications document would be released tomorrow. This lists international standards for products such as plasterboard, cladding, windows and external doors. "Later this year, additional pathways will go live enabling more high-quality building products to be used including over 200,000 plumbing products through the Australian Watermark scheme," Penk said.

Job ads fall for a second month
Job ads fall for a second month

Otago Daily Times

time35 minutes ago

  • Otago Daily Times

Job ads fall for a second month

The mid-year economic slowdown appears to be weighing on the job market with job advertisements falling for a second month. Data from employment website Seek NZ showed job ads fell 3% in June from a month earlier, and 3% lower than a year ago. Applications per job ad - recorded with a one-month lag - were down 2% monthly. It comes as various economic datasets point to the country's economic recovery stalling in the middle of the year. Seek country manager Rob Clark said job ad levels remained broadly flat for the past year. "While the volume remains below pre-Covid levels, there are pockets of growth, which should be cause for some optimism," he said. Job ad volumes were mixed across the regions, with Gisborne, Marlborough and Southland the only regions to see month-on-month growth in June. In Auckland and Canterbury, volumes fell 2% in June, while Wellington fell 4%. Otago was flat, while Waikato fell 4%. The only industry to see an increase in volumes was Information & Communication Technology, with more demand for ICT managers and networks & systems administrators. "Despite a monthly dip in June, demand within government and defence has jumped 51% year-on-year, and we're seeing a growing number of industries return to annual growth within the professional and consumer services sectors," Clark said.

Prime Minister Chris Luxon faces questions on building product investment, immigration numbers
Prime Minister Chris Luxon faces questions on building product investment, immigration numbers

NZ Herald

time2 hours ago

  • NZ Herald

Prime Minister Chris Luxon faces questions on building product investment, immigration numbers

Prime Minister Christopher Luxon will face questions this morning on the latest boost for builders, the Foreign Minister's concerns on immigration numbers and the new road cone hotline. He will join Newstalk ZB's Mike Hosking at 7.30am. It comes after Luxon said the Government would be increasing the number of building products available in New Zealand, including plasterboard, cladding systems, external doors and windows. He made the announcement at the weekend with Building and Construction Minister Chris Penk, who said thousands of overseas building products had been given the green light for construction. '[This ends] costly monopolies on a small number of products that are currently used in New Zealand,' Penk said. 'It is 50% more expensive to build a standalone home in New Zealand than in Australia. That is frankly outrageous.' Luxon is also expected to face heat this week from NZ First leader Winston Peters, the Minister of Foreign Affairs, over his concerns about the number of migrants entering New Zealand. Peters said he is observing an 'alarming development' overseas where 'careless immigration policies' are 'transforming cities' and 'changing centuries of development and social life'. He referred to his party as 'nationalist' while his coalition partners are 'globalists', and believes Kiwis are increasingly worried about immigration issues. 'We intend to turn that problem into a success story, so people do understand that, when you're coming here, there are some fundamental things you need to sign up to,' he said. 'If you don't want to sign up to it, don't come.' Meanwhile, Luxon's new hotline to curb overzealous road cone use has come under scrutiny, with a chief executive of a traffic management company saying he is very doubtful it will work. Traffic management planning company Parallaxx helps train WorkSafe staff for the hotline, but chief executive Dave Tilton is sceptical of the concept, partly due to the number of people a report needs to go through before action is taken. 'We absolutely have oversupply [of road cones] beyond the minimum without question ... but I'm very doubtful that this particular thread [the hotline] is going to bear fruit in fixing it.'

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store