The amount of KiwiSaver funds withdrawn in Tauranga for hardship reasons has risen since 2018.
The trend has budget advisers worried.
Figures from the Inland Revenue Department show in 2019, 281 Tauranga people collectively withdrew a total of $1.7 million from their KiwiSaver for hardship reasons, compared with 291 people who withdrew $1.6m in 2018.
KiwiSaver funds are accessible after a person turns 65, the current age of retirement in New Zealand.
KiwiSaver users were only able to withdraw money early to purchase their first home, or if they were suffering from "significant financial hardship", an Inland Revenue spokeswoman said.
This included being unable to meet living expenses, such as rent or mortgage repayments, having to modify your home to meet special needs, or paying for medical treatment.
KiwiSaver users were also able to withdraw funds early to cover the costs of a dependent family member under the same circumstances, she said.
Tauranga Budget Advisory Services manager Shirley McCombe said they tried to work with clients before their financial situation got to the point where they needed to withdraw their KiwiSaver funds.
"Wherever possible, we try to work with the person to identify the cause of the financial hardship," she said.
"Sometimes, it is due to issues completely outside of their control ... other times it is due to underlying issues, that if not addressed, will reoccur."
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McCombe said the main concern in those situations would be that clients would be in debt again later in life, with their retirement savings diminished.
"Many think that withdrawing their KiwiSaver [early] is the only way to manage their situation, particularly if it is a debt collection agency is involved," she said.
However, an Inland Revenue spokesperson told the Bay of Plenty Times if someone applied for bankruptcy, creditors would not be able to access their KiwiSaver funds.
Te Tuinga Whānau Support Services Trust executive director Tommy Wilson said he wasn't surprised by the number of people withdrawing their KiwiSaver early for hardship reasons or the amount of funds they were collectively withdrawing.
"It doesn't surprise me," he said.
"It's a reflection of how hard it's getting."
He said many people, especially those who purchased more property, failed to see the effect their actions had on others in the population.
"That's a lot of the problem ... when people buy more and more [property] for personal gain, someone else has to carry that cross of hardship," he said.
"I think most people do understand, but really don't want to know ... it's the inconvenient truth, of hardship at the expense of those who are doing very well out of Tauranga."