However, funds withdrawn from KiwiSaver can't be used as a deposit on house or a section.

Q: Can you tell me if I can access my KiwiSaver deposit for a home deposit, or even to buy a freehold section? I have owned a property with my ex-wife, but had to sell it when we split up. I would really like to use my $30,000-plus in KiwiSaver to buy another house, and if I can, could I maybe use my KiwiSaver money to buy a freehold section instead, as my son is a builder.

After three years of KiwiSaver scheme membership, you may be eligible to withdraw some or all of your savings (except the $1000 kickstart and member tax credits) to put towards the purchase of your first property.

The property must be intended as your main residence (the KiwiSaver Act allows for the purchase of land).

As a previous homeowner, you might qualify for a home purchase withdrawal - provided you haven't made a home purchase withdrawal from KiwiSaver before.


To qualify, Housing New Zealand must determine you are in the same financial position as a first-home buyer - you'll find details of how to apply at

Under the KiwiSaver Act, home purchase withdrawals can only be paid to your solicitor's trust account, for payment to the seller on settlement date.

In most cases, this will mean your withdrawal can't be used towards the deposit.

In addition to the first-home purchase withdrawal, there is a KiwiSaver first-home deposit subsidy that's administered by Housing New Zealand. This is worth up to $5000, and previous homeowners may be eligible. You can apply for this when you apply for approval to make a home purchase withdrawal.

•Mark Fitz-Gerald, Westpac head of investments and insurance.
Q: I have just found out the English have a system called SIPP (Self-Invested Personal Pension) where you can choose to run your own fund within approved companies. This seems an excellent option for a proportion of KiwiSavers in our own schemes. Why is this not included in options here?

A SIPP is a superannuation scheme designed specifically for the UK market, which allows investors to make their choices about what assets to hold and when to acquire or dispose of those assets.

It is similar to what Australia has with its Self-managed Super Funds.

It is definitely not for everybody as it requires time and specialist investment knowledge to manage your own retirement fund.

Anyone taking on this level of responsibility should have a high level of financial acumen, be prepared for rigorous compliance oversight and understand that the increased costs may outweigh any benefits.

It is also worth noting that KiwiSaver account balances are still relatively small, which would make it difficult for most individuals to obtain a well-diversified portfolio unless they invested into a larger balanced fund run by a professional manager - which defeats the purpose.

That's not to say that we won't see people managing their KiwiSaver accounts some time in the future. However, it's likely most investors will still prefer to let professional investment managers look after their funds, given that they have the resources, procedures and specialist investment knowledge.

•Sean Butler, Fidelity Life investment specialist.

Q: I have been backing KiwiSaver to all and sundry but some thoughts have just unsettled me. I have invested in KiwiSaver for the last five years and will quit this year as a 66-year-old. Between me and the employer and Government I will collect around $16,000, of which I have contributed about $5500. My fund, according to the media, is managed by one of the top providers and the best that they have done is 2 per cent average over the past five years. This means I am losing about 2 per cent per annum (inflation) on all old money. I am going out on about three times what I put in so that's okay. However my children, who will be in for 30 years, will substantially lose real return on the old portion as the good initial return is only first year.

Can you project the returns so we know how it would turn out? Overall, will the returns move up, all things being equal? It is beginning to look like a worse return than the old life insurance "investments" which were about 3 per cent.

KiwiSaver is purpose-designed for accumulating long-term retirement savings and can't reliably be compared with old-fashioned life insurance policies.

For members, KiwiSaver is low-cost and, despite some rule changes, still generously subsidised ($1000 kick-start, member tax credit, employer subsidy).

The value of KiwiSaver's subsidisation is often overlooked, but investment markets could fall in value while KiwiSaver accounts could yet come out square after subsidies.

Alternatively, these subsidies could offset the rate of inflation, not counting any additional investment market returns that might be received.

While we wouldn't say that KiwiSaver is inflation-proofed, its subsidies help inflation-protect it to some degree.

Your quoted numbers prove the point that despite unusually turbulent performance by investment markets over recent years, you can still come out with a lot more retirement savings capital than you put in even if your fund returns only 2 per cent per annum.

It's not possible to project what KiwiSaver investment returns will be over the next 30 years, because that depends ultimately on yet unknown investment market returns.

However, your children are likely to be better off financially for having accumulated a retirement nest egg through KiwiSaver than from simply hoping for the best and leaving things to chance.

•Sam Stubbs, Tower Managed Funds chief executive.

Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.

To have your KiwiSaver questions answered by the NZ Herald's panel of industry players email Helen Twose,