Third of KiwiSavers cashing in

About 75,000 people will be eligible to take their money out of KiwiSaver in the year to June 30. Photo / APN

About one-third of eligible retirees applied to take their money out of KiwiSaver last month and the country's largest provider expects it to rise to 50 per cent.

From July 1 savers over 65 who have been in KiwiSaver for five years have been able to apply to their provider and break into their nest egg.

About 17,500 people were eligible last month, with a total 75,000 savers able to take their money out in the year to June 30.

OnePath, which manages nearly $2.9 billion of the KiwiSaver money and has more than 470,000 members, said it had received about 800 applications from people wanting to withdraw their money out of several thousand eligible savers.

ASB Bank, the second-largest market player with $2.5 billion, said it too had had applications from about a third of its eligible savers.

Tower, which manages close to $800 million, said its withdrawal request rate was 35 per cent, with 188 out of 536 eligible members requesting full or partial payouts.

OnePath's David Boyle said he had not known how many applications to expect but there was a bubble of older people who had joined KiwiSaver from the start who were now becoming eligible to take the money out.

"We have had around 800 applications," he said.

"Those are the applications received to date but because they have to produce a statutory declaration it may take a little more time to flow through."

The number was about a third of the people eligible to take their money out.

But Boyle said he expected the percentage to go up.

"I wouldn't be surprised if it went up to 50 or 60 per cent."

He said those people who had applied early probably had a particular reason or use for the money.

Savers can also apply to have a partial withdrawal or be paid regular lump sums. But Boyle said this had not proved to be popular so far.

"Given the smaller balances in people's KiwiSaver accounts we believe this is unlikely to happen much in the early stages."

However, the provider had received positive feedback from people surprised at how much money they had in their accounts.

Boyle said it was taking on average seven to 10 days for the KiwiSaver money to be paid out once the company had checked that the person was eligible and that their eligibility date had been reached.

The rules
* From July 1 people over 65 who have been in KiwiSaver for five years have been able to apply to withdraw their funds.
* Those who are eligible to get their money out no longer get the Government contribution and employers do not have to keep contributing either.