COVID-19 has caused financial difficulty for many New Zealanders. If you have funds in the ASB KiwiSaver Scheme, it can be tempting to apply to make a withdrawal - but this should be a last resort. There are different financial packages offered by ASB and the Government and these should be considered first before trying to access your KiwiSaver.
How can we help?
Worried about your KiwiSaver balance?
In February and March 2020, COVID-19 caused a significant amount of uncertainty for investment markets around the world. As a result, KiwiSaver fund balances fell drastically, but have been recovering over April, May and June. Market volatility can be unsettling but switching funds in response to events like COVID-19 might not be a good idea. Lower risk or conservative funds might not have seen such a steep fall in value, but it probably means they will recover more slowly as well. Changing funds can have the effect of locking in the loss you've seen, and that you miss out on the benefits of an eventual recovery in investment markets.
KiwiSaver is all about reaching your long-term retirement or first home goals. It's best to focus on your long-term investment plan, rather than the daily movements you might see in your balance.
Had a drop in your income?
Your day to day needs always take priority over long-term goals but it's also important to know what options you do have in managing your KiwiSaver account if you've had a drop in your income. The following options can help you through, but also bear in mind, that reducing your contributions could affect your long-term savings.
Reduce your contribution rate
If your income has dropped, any KiwiSaver contributions made through your employer will automatically reduce as they are calculated as a percentage of your salary or wages. The contribution rates you can choose to apply to your KiwiSaver account are 3%, 4%, 6%, 8% and 10%.
You can choose to decrease your contribution rate as low as 3% of your pay and this may help you meet your day to day expenses during this uncertain time. If you’re already on 3%, a savings suspension is the only option to reduce your contributions further.
You can ask your employer to change your contribution with this Inland Revenue form.
If you are self-employed and make regular contributions directly to your KiwiSaver account, you can reduce the amount yourself by amending your automatic payment or direct debit. Give us a call on 0800 272 738 to discuss.
Temporarily stopping your KiwiSaver contributions
You can ask your employer to stop your employee KiwiSaver contributions until things get back to normal. This is called a savings suspension and you can choose to stop your employee contributions for 3 months to 1 year, it's up to you.
A savings suspension will let you keep more of your income. However, your KiwiSaver balance will grow at a slower rate if you stop contributing. It's also important to understand that if you stop contributing to your KiwiSaver account, your employer will no longer need to make matching contributions.
This is a last resort approach but one you may wish to consider. Try to keep saving for your future unless you’ve already exhausted all other support options.
If you do stop your KiwiSaver contributions, be sure to start contributing again in the future, when you’re ready to.
Inland Revenue has more information on how to start a savings suspension.
Are you suffering financial hardship?
If you are facing financial hardship, as defined in the list below, you may be able to access some of the savings in your KiwiSaver account. The rules around accessing your KiwiSaver are set by the Government.
For the purposes of KiwiSaver, a financial hardship withdrawal application may be considered if you can't afford:
- Your mortgage, rent or board
- Basic food and groceries
- Utility bills like your power, water, electricity or phone
- Basic transportation costs, petrol or bus fares
- Medical or care costs for yourself or someone fully dependent on you
- Home modifications for your special needs or those of a dependent family member
- Funeral costs of your dependent family member
- To pay for medical treatment for yourself or a dependent family member
- Living expenses due to a serious illness
See more about the hardship application process and eligibility here.
Have you accessed all available support?
Remember, there are lots of financial support options available which you should explore before you'll be able to access your KiwiSaver.
Accessing your funds if you're over 65 years old
If you're 65, you can access your funds at any time. There are a few ways you can do this.
- Withdraw some of your savings as required. This usually takes about 5 business days.
- Set up regular withdrawals. This has some extra requirements, which we can discuss.
- Close your ASB KiwiSaver Scheme account by withdrawing all your savings. This can take up to 15 business days, as we have to involve Inland Revenue.
Please note, if you joined KiwiSaver before July 2019 and decide to start making withdrawals prior to being a member for 5 years, you may miss out on future Government and employer contributions.
It's a good idea to think about using your KiwiSaver account as an investment even past retirement. You don't have to withdrawal your entire balance, and the ASB KiwiSaver Scheme is a low cost investment that can earn potentially greater returns than a savings account or term deposit.
More information
To find out the process of withdrawing and to access the application forms, go to our guide for withdrawing your KiwiSaver savings at retirement.
Contact us
Interests in the ASB KiwiSaver Scheme (Scheme) are issued by ASB Group Investments Limited, a wholly owned subsidiary of ASB Bank Limited (ASB). ASB provides Scheme administration and distribution services. No person guarantees interests in the Scheme. Interests in the Scheme are not deposits or other liabilities of ASB. They are subject to investment risk, including possible loss of income and principal invested. For more information see the ASB KiwiSaver Scheme Product Disclosure Statement available from this website and the register of offers of financial products at www.disclose-register.companiesoffice.govt.nz (search for ASB KiwiSaver Scheme).
