Nearly 78,000 Kiwis have put a hold on saving for their retirement through KiwiSaver, figures from the Inland Revenue Department show.
People who have been in KiwiSaver for at least a year can go on a contribution holiday for between three months and five years by getting in touch with the IRD.
The total also includes those who have got into serious financial hardship and can stop contributing even if they have been in the scheme for less than a year.
While it's only 4.1 per cent of the 1.9 million people in KiwiSaver, the proportion is growing each year and the length of time people are asking to put their savings on hold for is also increasing.
In 2009 2.3 per cent of the members had their savings on hold. That grew to 3.12 per cent in 2010 and 3.6 per cent last year.
Figures from the IRD's annual report show that in 2009 50 per cent of those on a contribution holiday were on the maximum time of five years while in the year to June 2011 more than 80 per cent were on the maximum.
The most common age-group for those putting their retirement savings on hold was the 25- to 34-year-old bracket with males making up more than half of those on hold in that age-group.
Tower head of investments Sam Stubbs said the trend was not surprising.
"It's people who have either got first homes or young kids. You would expect those people who had enrolled and were finding it tight to take up the holidays."
Stubbs said it was also unlikely that the numbers showed the true picture of those not contributing to KiwiSaver.
The Inland Revenue figures capture only those who have actively rung the department and asked to be put on a holiday.
They do not show those who may have lost their jobs, or are self-employed and have decided not to contribute because they cannot afford it.
The numbers are also skewed by the large number of children signed up to the scheme. Of the 1.9 million nearly 317,000 are under 18.
A spokesman for Inland Revenue said the department was unable to provide the overall number of members who were actively contributing to KiwiSaver.
"This is because members can make voluntary contributions directly to their scheme providers; these are not processed by Inland Revenue."
A spokeswoman for AMP, a default scheme provider with one of the largest memberships, said around 75 per cent of its members were actively contributing. "Of those not contributing nearly half made a contribution last year; 18- to 40-year-olds make up most of non-contributors."
Fisher Funds principal Carmel Fisher said around 5 per cent of its employed members were on contribution holidays but its total member figures were skewed by having large numbers of young, non-contributing members and self-employed members.
Stubbs said his worry was if members permanently stopped saving. "It would be a tragedy if it becomes the norm if they do it for the rest of their lives."
Stubbs said it would not be an issue if the scheme became compulsory.
But Fisher believed the ability to take a contribution holiday was one of the appealing aspects of KiwiSaver.
"While there will be some members who take a holiday just because they can, it is important that members can stop contributing if their circumstances change and it becomes too difficult.
"Those members who have been in KiwiSaver for a while will understand how quickly their savings can compound so will hopefully restart contributions as soon as they are able."
One Path's David Boyle said even those on contribution holidays could make one-off payments. "If they can make the minimum contribution of $20 a week that ensures you get the maximum benefits of the tax credit ... Even if you don't make the $20 whatever you put in is matched by 50 per cent."By Tamsyn Parker Email Tamsyn