Over $100 million was taken out of the KiwiSaver accounts of New Zealanders last year, through financial hardship claims.
Associate Professor Claire Matthews from Massey University says it’s a record amount of funds being taken out.
She told TVNZ1's Breakfast it's better to keep the money in KiwiSaver, if possible.
"It really comes down to the individual situation. If at all possible it’s much better to leave your funds in your KiwiSaver."
"Obviously the purpose of KiwiSaver is to help you save for your retirement and if you take it out those funds aren’t going to be there," she said.
Associate Professor Matthews went on to say: "But at the same time if you’re going through a period of intense financial hardship then it might be that retirement is not that important."
Ms Matthews said the reason for the spike in claims is likely because more people are becoming aware that they can access it if needed.
She also explained that a large amount being withdrawn shouldn't affect the overall KiwiSaver scheme.
"It is a cost to the individual," she said.
"It shouldn't generally be a problem, I wouldn't expect financial hardship applications to get to a point where it would have that sort of impact."
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