KiwiSaver members are being urged not to tap into their retirement savings unless it is a last resort after hardship withdrawals surged during the lockdown.
Inland Revenue figures show almost $14 million was taken out of KiwiSaver accounts in April through financial hardship claims - nearly double the amount taken out in April last year.
• Covid 19 coronavirus: KiwiSaver members could miss out on $3.5 billion in retirement
• Premium - Gillian Boyes: KiwiSaver's Covid 19 coronavirus report card
• Covid 19 coronavirus: KiwiSaver funds shrink by $4.5 billion to $59b in three months, most funds in red
• Covid 19 coronavirus: All your KiwiSaver questions answered
And Claire Matthews, a retirement savings expert at Massey University, expects hardship claims could rise again as more people lose their jobs through the economic downturn.
"I think there is a significant chance it will increase again. It will depend on what happens with the economy."
Matthews said it often took time for the impact of an economic downturn to flow through to the wider workforce.
"That is why I am slightly surprised around the April figures. I thought it would have taken longer."
The data shows 1897 people raided their superannuation accounts in April for a total of $13.78m. That was a big jump on the 1361 people who took money out of their KiwiSaver accounts in April last year because of financial hardship.
The average amount also jumped significantly from $5544 per person to $7264.
The amount withdrawn in May was also higher at $12.95m compared to $9.35m in the previous May as more people took out larger amounts.
Matthews said part of that was people having higher account balances but she said another surge in hardship claims could happen.
"I would expect to see some increase - whether it is to that extent - no one knows."
She said it would depend on how quickly the economy recovered.
Matthews urged those considering a hardship withdrawal to think twice.
"If your financial situation is really dire it is appropriate. But it shouldn't be your first port of call."
Matthews said people should consider alternatives such as a short-term loan from a reputable low-cost lender, cutting back on expenses and selling items to make money before tapping into their retirement savings.
"Because it does have an impact down the track."
While someone in their 30s might consider it no big deal she said raiding your retirement savings now would have a detrimental impact on how much you had at retirement.
"That is why there is a high threshold [for approval]."
Matthews said one option people could consider was pausing their contributions to KiwiSaver by taking a savings suspension.
"In the short term that is a good response." But she also warned savers not to leave their contributions on hold for longer than necessary.
"It helps in the short term but is damaging to your retirement in the longer term."
Blair Vernon, chief executive of KiwiSaver provider AMP Wealth Management, said the industry was expecting a rise in claims this year.
"The KiwiSaver provider community expects there will be an elevated level of hardship claims and drawdowns through the balance of this year.
"We think there will be a steady stream of hardship claims. We certainly saw a spike in April."
Vernon said a lot of people were just asking about a withdrawal and didn't go ahead with it.
"A lot of people were trying to understand how hardship works."
For people to qualify they have to show they can't meet their day to day living expenses. It can't be withdrawn just to pay off debt.
Vernon said he expected a rising number of redundancies.
"Many of those have been announced but haven't actually occurred yet. We know there will be some people facing those challenges."
But he said people should also look at what was available in government assistance as many people calling AMP during the lockdown had not been aware of the help they could get.
"We spent a lot of time helping people understand the myriad of things that were available. It was quite hard to keep up."
Vernon said others were already tightening their belts in anticipation of job loss.
"Some people have already adjusted their spending because they can either see redundancy coming or they are a little less certain about their prospects."
Vernon said the $14m should also be kept in perspective. "Though that drawdown may sound big, for KiwiSaver it is not a large number."
More than three million New Zealanders belong to KiwiSaver with around $60 billion invested.