LISTEN: More people are trying to make early withdrawals from their KiwiSaver as financial hardship brought on by the lockdown makes it tougher for them to cover outstanding debts.
Generally, accessing KiwiSaver funds before a person reaches the age of retirement is not allowed but there are some exceptions including putting KiwiSaver funds towards a first home, permanently moving overseas, health reasons, or if a person enters significant financial hardship.
But there has been a 5 to 10 percent increase in the number of complaints from people who had failed to access money on hardship grounds from their KiwiSaver provider, according to the disputes resolution organisation Financial Services Complaints.
It says it receives about 100 complaints per month.
David Boyle, former general education manager at the Commission for Financial Capability, says there is a "stringent" process in place for trying to access KiwiSaver funds early.
But there is an obvious pressure on people right now to pay their debts due to the financial impacts of COVID-19 hitting people hard.
"Take into account where we are with COVID and the impact for New Zealanders, financially it is very, very stressful," Boyle told Magic Talk.
He says we are underestimating the impact COVID-19 is having on people's day-to-day lives like paying bills or incomes are not as "confident" as before the pandemic.
Boyle says in most cases, with all KiwiSaver providers, there is a process people can go through to access funds early.
"They need to show that they're in severe financial hardship," he said.
"That means basically you're in a situation where it may impact where you're living - your mortgage, your household expenses - to a point where if you didn't get access to these funds then you would be put in a far more difficult situation than you would be if, for example, you tried to manage your own way through in the longer term."
Listen to the full interview with David Boyle above.
Magic Talk | Mornings with Leah Panapa, weekdays from 9am.