The country's largest KiwiSaver provider says the amount of money people are taking out to buy their first home soared last year.
ANZ bank which manages $8.34 billion out of the total $32 billion invested in KiwiSaver said its members withdrew $148 million in the year to March 31 - up from $62 million in the prior year.
John Body, managing director retail and business banking and wealth at ANZ, said more than 8000 of its members took money out of KiwiSaver to buy a first home last year with the average withdrawal $18,361.
That's up from the average withdrawal of $10,611 in 2013.
Body said people were able to take more money out because their balances were now higher and rules had changed allowing people to withdraw more of their savings.
"As KiwiSaver balances grow, more people are taking advantage of the option to withdraw some or all of their money to help buy a new home."
Changes to KiwiSaver rules made last year mean people are able to take all of their money out of KiwiSaver apart from the $1000 put in initially by the government.
But Body said some people were missing out on money which could be used towards a first home because they did not know the rules.
People have to be in KiwiSaver for at least three years before they can take their own money out - but to qualify for the government's Homestart subsidy they have to contribute at least 3 per cent of their income for three years as well as meeting income and house price caps.
A first home withdrawal can make a big dent to the total amount of money you have when you retire.
Body said those who wanted to make the most of the government subsidy had to be saving for five years as it pays $1000 per year up to $5000 for a an existing house and up to $10,000 for a new build.
He also urged savers to keep contributing to their retirement savers after they had withdrawn money for a home.
"It makes sense to resume contributions as soon as possible and consider increasing your contribution rate to ensure you catch up and achieve your retirement savings goal."
Five tips for using KiwiSaver to buy your first home
• You need to be a member of KiwiSaver for at least 3 years to get your money out.
• It must be for your first home or meet a strict criteria to be a 'second chance' buyer.
• Your withdrawal is paid into your solicitor's trust account before you settle on the property.
• You will need to provide the required paperwork to your KiwiSaver provider at least 10 working days before the settlement.
• Check to see if you are able to get the government subsidy called a Homestart grant which can be used on top of your own savings. Housing New Zealand administers this subsidy which you can find out about here