First home withdrawals from ANZ’s three KiwiSaver schemes top $3 billion

KiwiSaver is increasingly central to New Zealanders’ twin goals of buying a first home and saving for their retirement years.

That’s reflected in customer data from ANZ Investments showing that over 115,000 members of its three KiwiSaver schemes have made a withdrawal to help pay for the deposit on their first home. These withdrawals collectively total over $3 billion.

Encouragingly, almost 90 per cent of members who made a first home withdrawal in the past 12 months continue to make contributions to their KiwiSaver account, helping set themselves up for a more comfortable life after 65.

First home withdrawals from ANZ KiwiSaver schemes top $3 billion:

More than 9,200 members of ANZ’s three KiwiSaver schemes have made a first home withdrawal in the past year. This brings the total number of members who have made a first home withdrawal to more than 115,000; with total withdrawals topping $3 billion.

• The average amount withdrawn by members over the past 12 months was $43,000.
• The average withdrawal by male members was $47,126 compared to $38,358 for females – a reflection of the gender savings gap.
• 86 per cent of withdrawals were made by customers aged under 45, with an average age of 34. This aligns with data from ANZ NZ showing the average age of first home buyers taking a home loan is 35.
• 60 per cent of first home buyers were invested in growth-oriented funds (High Growth, Growth, Balanced Growth) at the time of withdrawal; while 14 per cent were invested in a Cash fund.

Fund choice:

The 60 per cent of members who were invested in a growth-oriented fund includes those members who had chosen our Lifetimes option, where KiwiSaver savings are moved through ANZ Investments’ funds based on the member’s age. At age 34, all Lifetimes members are in the Growth fund.

If Lifetimes members are excluded from the figures, the most popular fund choice was the Cash fund.

In the 24 months before buying a first home, members most commonly switched out of the Growth fund into the Cash fund. This suggests these members were aware that growth-oriented funds are likely to be more volatile than conservative funds, and they wanted to safeguard their “nest egg.”

Non-Lifetimes members tend to do the opposite switch once they have purchased a home. Those members who have switched from the Cash fund are most likely to choose the High Growth fund.

“It’s a good idea to review your KiwiSaver fund when you are saving for your first home because there’s less time for your balance to recover from market dips,” says Fiona Mackenzie, ANZ Investments’ Managing Director.

Contribution rates:

89 per cent of ANZ Investments’ members who made a withdrawal in the past 12 months were still contributing to their KiwiSaver accounts three months later.

That compares to 92 per cent who were contributing before their first home withdrawal.

89 per cent is still an exceptionally high contribution rate given only 60 per cent of the total KiwiSaver base is contributing.

34- and 35-year-olds are part of the Millennial generation. If we look at Millennials, around 58 per cent are making regular contributions. 59 per cent of women are contributing and just over 57 per cent of men.

Gender gap:

If we look at the average amount our members withdrew for their first home purchase, the gender savings gap appears - with a difference of around $9,000 on average between the amount male and female members withdraw to help buy a home ($47,126 for men compared to $38,358 for women).

Across the entire Millennial age group, the average balance is just over $33,600 for men and almost $28,000 for women – a gender savings gap of just over $5,500.

By age 64, the gender savings gap reaches $16,000.

Our customer data shows there is also a gender gap in the fund selection choices made by the members of ANZ Investments’ three KiwiSaver schemes.

The gap is most pronounced in the High Growth Fund, with just over 60 per cent of members being men.

“We know many younger members are in a fund that’s too conservative for their stage of life,” says Fiona Mackenzie.

“Growth funds can be more volatile, but over a lifetime of investing, they’re expected to deliver stronger returns and lead to higher balances.”

Looking ahead:

Using KiwiSaver savings for a first home deposit is a significant achievement for our members, but it can put a big dent in the amount they will have when they retire.

“So, it is important that you resume contributions as soon as possible and check you’re in the right fund to ensure you catch up and achieve your retirement savings goal,” says Fiona Mackenzie.

“We have just launched Your KiwiSaver Calculator in our goMoney app, which is a fantastic online tool to help you get back on track.

“We are living and working longer. Retiring at 65 is no longer guaranteed. So, the more you can save now the greater the choices you will be able to make in later life.”

ANZ Investments has just launched Your KiwiSaver Calculator in ANZ’s goMoney app.

It gives ANZ KiwiSaver members an estimate of what they are on track to have saved by age 65, based on their own data. Members can explore different fund and contribution options to see how making changes now can affect their balance in the future.