Last updated: January 2026

If you’ve been looking at your KiwiSaver balance and wondering how accessible it really is, you’re not alone. With higher living costs, economic shocks, and market ups and downs over the past few years, many Kiwis have asked the same questions:

Can I withdraw my KiwiSaver? Can I stop contributing? And what are the consequences if I do?

This guide explains the two main options people usually explore during tough financial times:

• KiwiSaver financial hardship withdrawals

• KiwiSaver savings suspensions

   

We’ll cover what’s allowed, what’s not, and what to think about before making a decision.


Why people start looking at their KiwiSaver

KiwiSaver is designed as a long-term retirement savings scheme, but recent years have tested that patience. Both share and bond markets fell sharply in 2022, creating the biggest drop in KiwiSaver balances since the early days of COVID-19. While markets recovered through 2023 - 2025, it hasn’t been a smooth ride, particularly for growth-focused funds.

Add to that the real-world shocks many households have faced including natural disasters, rising insurance costs, higher interest rates, and ongoing cost-of-living pressure, and it’s understandable that people start eyeing the savings they can see but can’t easily touch.

By law, most people can’t opt out of KiwiSaver after the initial eight-week window following enrolment. Inland Revenue outlines these rules clearly on its website: https://www.ird.govt.nz/kiwisaver/kiwisaver-individuals/withdrawing-your-kiwisaver  

That said, there are some other options worth understanding.


Withdrawing KiwiSaver early: What is a KiwiSaver 'financial hardship withdrawal'?

A financial hardship withdrawal allows you to access some of your KiwiSaver savings early, but only in serious circumstances.

These withdrawals are tightly regulated. You can’t simply withdraw your funds because markets are down, or money is tight. Your KiwiSaver provider and an independent supervisor must approve the application, following criteria set out in legislation and overseen by the Financial Markets Authority (FMA) and Inland Revenue.

Simplicity also has more information around KiwiSaver withdrawals for members via our Help Center.


What counts as serious financial hardship?

While each application is assessed individually, hardship generally means being unable to meet essential living costs, such as:

• Rent or mortgage payments

• Basic food and utilities

• Essential medical treatment

• Funeral costs for a dependant

The FMA makes it clear that hardship withdrawals are intended as a last resort, once other reasonable options have been explored.

At Simplicity, we work with Debtfix, a specialist financial hardship service, to support members through this process. Debtfix helps members explore alternatives first, including budgeting advice and debt restructuring, which can sometimes avoid the need to withdraw KiwiSaver altogether.

And with a high number of Kiwis living paycheck to paycheck, the pain is absolutely real. We get it. By law, you're unlikely to be able to opt out of KiwiSaver after 8 weeks of being enrolled (see the IRD website for more details). But there are obviously other options that can be explored.


What KiwiSaver money can you withdraw?

If approved, you may be able to withdraw:

• Your personal contributions

• Employer contributions

• Investment returns

You cannot withdraw:

• Government contributions

• Any kick-start amounts (for older accounts)

This is consistent across all KiwiSaver schemes and is set out in KiwiSaver legislation, administered by Inland Revenue.


What about stopping contributions instead? The KiwiSaver savings suspension

A savings suspension allows you to temporarily stop contributing to KiwiSaver, providing short-term cash flow relief without touching your existing balance.

However, there are some important trade-offs:

• Your employer stops contributing while your contributions are paused

• You may miss out on the Government contribution unless you still contribute at least $1,043 in a year to receive the $261 maximum (figures current as at 2026, per IRD guidance)

More detail on savings suspensions is available on the IRD website. If you've been in KiwiSaver for more than 12 months, you don't need to provide a reason for a savings suspension. If you've been a member for less than a year, you'll need to show evidence of financial hardship to take the break.


How a savings suspension affects your future savings

Pausing contributions can make sense in the short term, but it can reduce your long-term retirement balance more than people expect. That’s because you lose not just your own contributions, but also employer and government money, and the compounding returns that come with them.

Sorted’s official KiwiSaver calculator (run by the Retirement Commission) is a useful tool for modelling this, giving you the ability to factor any savings suspensions into your forecasted KiwiSaver future balance.


Before you withdraw or suspend, ask yourself these questions

Before applying for a hardship withdrawal or savings suspension, it’s worth taking a step back and asking:

1.  Have you reviewed your spending and reduced non-essential costs?

2.  Have you explored financial restructuring options, such as loan hardship relief or payment holidays?

3.  Could you reduce your KiwiSaver contribution rate to the minimum 3%, instead of stopping entirely?

4.  Do you understand how pausing or withdrawing will affect your retirement balance long term?

5.  Do you know which fund you’re in, and whether it still suits your timeframe and situation?

Not everyone can avoid hardship options, but exploring alternatives first can make a meaningful difference.


Learn more and get support

We explain KiwiSaver withdrawal rules and real-life scenarios in our Money Made Simple podcast, available on our website, Spotify, Apple Podcasts and YouTube.

You may also find these official resources helpful:

• Sorted KiwiSaver guides: https://sorted.org.nz/guides/kiwisaver

• IRD KiwiSaver overview: https://www.ird.govt.nz/kiwisaver

If you’re struggling, reaching out to a financial mentor or your KiwiSaver provider early can open up more options than you might expect.


TL;DR: KiwiSaver withdrawals and suspensions

• KiwiSaver hardship withdrawals are allowed only in serious circumstances

• You can withdraw contributions and returns, but not government contributions

• Savings suspensions stop contributions but also pause employer and government payments

• Both options can significantly affect long-term retirement savings

• Exploring alternatives first can help protect your future balance

The information provided and opinions expressed in this post are intended for general guidance only and are not personalised to you. These materials do not consider your particular financial situation or goals and are not financial advice or a recommendation. This post is not intended to convey any guarantees as to the future performance of any of the investment products, asset classes, or capital markets mentioned. Past performance is no guarantee of future performance. Information is current at the time of posting, and subject to change without notice. Simplicity NZ Ltd is the issuer of the Simplicity KiwiSaver Scheme and Investment Funds. For Product Disclosure Statements please visit our website simplicity.kiwi.