Susan Edmunds. Photo: RNZ
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KiwiSaver is a scam and I refuse pointblank to put another cent in it.
My partner of 14 years passed away in 2016 from cancer, after being diagnosed only four days earlier. I was in turmoil, distressed and in shock.
I applied to KiwiSaver under hardship and only wanted $2000, and had all the paperwork done and signed off to help with the tangihanga, funeral costs and burial expenses. My application was denied, because I wasn't facing hardship, but was struggling with money for the tangihanga and ended up getting a loan from the bank of $2000, which I'm still paying it back at $5 or $10 weekly or fortnight, when I can afford it, so it's been almost 10 years now and still paying my debt.
However, I know four people who have applied for funds from their KiwiSaver accounts under the guise of hardship and they were approved. Two people I know went overseas on holiday, one person bought clothes and personal items, and the other person was able to withdraw $10,000, and spent the money on a trip around NZ and a few hundred dollars on cigarettes,
How does that work? I was struggling with bills, losing my long-term partner and everything associated with tangihanga, and I'm still paying it back, not to mention each month I'm getting charged bank fees etc., so KiwiSaver is a scam and I will never ever pay another cent towards it.
If I die before I turn 65, I have stipulated in my will that my KiwiSaver funds are to be given to St John's Ambulance service, because there's no way in hell my money is going to be given to the bank or government.
I will try to address your points one by one.
Firstly, I can understand why you feel frustrated about not being able to access your money at a time when you needed it. That must have been extremely hard and would have made a horrible situation even tougher.
I think what has happened for you is that you weren't struggling enough to meet the criteria for a withdrawal.
KiwiSaver rules allow you to withdraw money to pay for a funeral, but only if you demonstrate that you have exhausted all your other options first. It sounds like that might not have been the case for you.
The rules are meant to be quite strict, because withdrawing money from KiwiSaver now has an impact on what you end up with at retirement. It makes a bigger difference than you might expect, because of the effect of compounding over time.
As you say, it does seem that sometimes people get their money out in less tough circumstances. It also feels to me - and this is just my opinion - that as it's become more common to make withdrawals, people seem to be dealt with more leniently.
I should note that I've suggested that to providers and supervisors, but they've said they stuck to the rules in the same way they always had!
In general, if people meet the financial hardship criteria - they're falling behind on their bills or they don't have enough money to live on, and don't have any other options - supervisor Public Trust tells me individuals are personally responsible for using the funds appropriately, once they're withdrawn.
If they apply again, at that point, the supervisor would check whether they used the money for the reason they said they would.
Koura Wealth founder Rupert Carlyon said providers received repeat applications for the same issues.
"People use the money for something else, rather than what they tell us they will use it for," he said. "There is not much we can do about it though.
"If they can show that they are still suffering hardship, we will process a new application. The only thing we can do is pay down debts directly, if they withdraw for an outstanding debt, but if they are claiming for living expenses, we don't have many options."
I really hope you might reconsider your stance on KiwiSaver, because although you've had a negative experience, it's really not a scam.
If you were to contribute, you could build up an amount of money that could be helpful when you hit 65. At that point, you can withdraw it whenever and however you like.
The money would only end up with the government if you had no family or friends to leave it to when you died, but donating it is a great option too.
I have $160,000 in three term deposit accounts that are due to mature on 1 October at five percent. I also have $55,000 in another term deposit account that matures on 30 October at 4.8 percent.
With interest rates dropping like they have, I'm not going to get rates like I have previously, if I renew the term deposits.
I also have $85,000, which is money for everyday use, so I would not be needing the term deposit amounts for, I would say, anywhere between 3-5 years, at a guess. I have $171,000 in KiwiSaver that has increased $15,000 in the last 12 months.
Am I best to put the term deposits into KiwiSaver or renew the term deposits, or is there another option I could consider?
I asked Carlyon for help on this question too, noting we can't give you personalised advice.
He said it could be a good idea to put it all in KiwiSaver and then set up a fortnightly withdrawal. Because you are 68, there are no limits on how you access money in KiwiSaver.
He said having money in one place would simplify the picture and mean you could get advice on the whole lot from someone with an overview of your full investment portfolio.
It's generally a good idea to keep some money in cash to come and go on, but it sounds as though that is already taken care of.
Carlyon pointed out that you could reasonably hope to live until you are 90, so you want to keep at least some of your money invested in assets with a bit of growth potential.
I would recommend talking to an advisor or your KiwiSaver provider to put a bit of structure and a plan in place.
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