There has been a 20 percent spike in the number of people applying to withdraw from their KiwiSaver funds, on the grounds of significant financial hardship.
The data for the three months to July comes from Public Trust which is a scheme supervisor, and has to give the final sign off on withdrawals.
Chief executive Glenys Talivai said the increase in applications are Covid-related because normally they would expect about a 4 percent rise year on year, in line with the number of people joining the scheme.
She said about 80 percent of applications are approved, but they do have to meet a high bar.
"While that might help them now, it does mean that when they retire they would not be in the same position as someone similar to themselves that hadn't needed to access their KiwiSaver.
"So it is quite challenging and it's why there was such a rigourous process put around accessing your KiwiSaver in the first place.
She said there was some confusion from applicants about what constituted significant financial hardship.
"There has been some publicity on this and we have heard from individuals who say 'if I could just [use it] to pay off my debt and I didn't have that outgoing I'd be in a better position, why couldn't I do that?' but while you're able to meet minimum repayments it doesn't necessitate significant financial hardship.
"We do get that people would be better off ... but it wasn't what KiwiSaver was set up for."
Talivai said Public Trust was preparing for an even greater increase later in the year.
"There are genuine cases where people need that money ... we pledge to have an answer within 48 hours of receiving an application."
She said the applications received by Public Trust had already been through the scheme provider, so were likely to be quality, hence the high approval rate.
She urged people to seek financial advice, regardless of their current financial position.
"Unfortunately, when people are needing to start thinking about accessing their KiwiSaver funds ... usually they are already in quite a tough position and so they have limited options."
"We would encourage you to get advice, start thinking about what would happen if I lost my job ... how would I navigate that."
Data from Inland Revenue shows the number of approved KiwiSaver withdrawals for July was up 20 percent on July 2019.
In July, $15 million was withdrawn attributable to financial hardship, up from $9.7m in July 2019.