Can I use KiwiSaver to start a business? It’s a fair question—and one that pops up often when you’re trying to turn a great idea into a real business but don’t have the funds sitting in your bank account. You’ve paid into your KiwiSaver for years, so why not use it to fund your next move?
Here’s the short version: KiwiSaver early withdrawal is possible in a few situations, like buying your first home or facing significant financial hardship, but using KiwiSaver for a business is not something the rules were designed to allow. That doesn’t mean you’re stuck. It just means you’ll need to get creative.
In this guide, we’ll walk you through what the law says, what your provider allows, and what alternatives exist if your retirement savings can’t be touched. We’ll also cover key pros and cons, outline smart funding options for new businesses in NZ, and give you a bonus tool to help you plan your finances before you invest a single dollar.
Can you really tap KiwiSaver for a startup?
If you’re wondering whether KiwiSaver can be used to start a business, the short answer is no. KiwiSaver is primarily designed to support your retirement, buy your first home, or offer financial support during very specific situations like illness or significant financial hardship.
There’s no official provision that allows you to directly withdraw KiwiSaver to fund a business, even if you’re self-employed. Providers are strict about this because it goes against the purpose of the scheme.
- Common KiwiSaver withdrawal reasons:
- Buying your first home
- Permanent emigration (except to Australia)
- Significant financial hardship
- Serious illness
- Retirement age (NZ Super eligibility)
- Not allowed:
- Business investment
- Personal loans
- Paying off unsecured debts like credit cards
You can also check out our article on KiwiSaver changes to stay updated.
KiwiSaver early-withdrawal rules and “significant financial hardship”
Some people look into KiwiSaver early withdrawal hoping that financial hardship might allow them to access funds to start a business. But here’s the catch: business funding doesn’t usually meet the criteria.
“Significant financial hardship” typically means you’re struggling to meet basic living costs like rent, power bills, or medical expenses. Starting a business, even with tight cash flow, won’t usually qualify.
Table: Withdrawal categories comparison
| Withdrawal Type | Purpose | Requires IRD/Provider Approval | Funds Available |
|---|---|---|---|
| First-home | Property purchase | Yes | Most of balance |
| Hardship | Basic living needs | Yes (strict) | Partial only |
| Retirement | Reached age eligibility | Automatic | Full balance |
| Serious illness | Long-term or terminal condition | Yes | Full balance |
| Business startup | Not permitted | No | Not available |
- To apply under hardship, you’ll need:
- Bank statements for 3 months
- Budget summary
- Overdue bill notices or eviction letters
- What’s NOT enough:
- Having no income temporarily
- Wanting funds for business setup or investment
For full criteria, see the FMA KiwiSaver hardship guide. If you want to know how this impacts the self-employed? Read KiwiSaver for self-employed.
Why KiwiSaver business funding is off-limits but 5 workarounds exist
If you’re disappointed by the restrictions around using KiwiSaver for a business, don’t worry. There are still several ways to secure funding in New Zealand without touching your retirement savings.
These options are more flexible, can be quicker to access, and won’t risk your long-term financial security. Here’s where to look first:
- Smart funding workarounds:
- Personal savings or family support
- Bank business loans or overdrafts
- Government grants (via NZTE or Callaghan Innovation)
- Crowdfunding or peer-to-peer lending
- Angel investors or startup incubators
- What to consider when choosing:
- Interest rates and repayment terms
- Speed of access
- Ownership or equity you may give up
Pros and cons of using retirement savings to launch a company
Even if you found a way to tap into KiwiSaver (e.g. via hardship), it’s worth considering whether it’s a smart move. Starting a business is risky, and retirement funds are meant to grow long-term.
Using retirement money for business funding means potentially missing out on compound interest, government contributions, and long-term security.
Table: Weighing it up
| Factor | Pros | Cons |
|---|---|---|
| Access to capital | Quick funds to launch | Risk of running out in retirement |
| Ownership control | No debt if self-funded | You carry all the financial risk |
| Tax consequences | No loan repayments | Potential penalties/less future growth |
| Flexibility | You call the shots | Less diversified financial position |
- Ways to reduce risk:
- Start small and scale gradually
- Keep KiwiSaver untouched and build other funding sources
- Use a financial advisor before making major money decisions
You’ll also find more tools and advice on our KiwiSaver for self-employed page.
Conclusion
So, can I use KiwiSaver to start a business? In most cases, no. KiwiSaver wasn’t built for business investment—it’s there to help with retirement, your first home, or true financial hardship. While it may be frustrating, dipping into your retirement savings for a business isn’t allowed unless you’re in very specific situations that don’t usually include entrepreneurship.
That said, you’ve got options. From small business grants to bank loans and crowdfunding, there are safer and smarter ways to get your startup off the ground without risking your future.
If you’re serious about launching a business in New Zealand, the best thing you can do is plan wisely. Run the numbers, explore every funding path, and reach out if you need help. We’re here to connect you with professionals who can guide you—so feel free to get in touch.
FAQ about can I use KiwiSaver to start a business
Can I use KiwiSaver if my business is a social enterprise?
No. Even if your business has a social or charitable mission, KiwiSaver cannot be withdrawn to fund it unless you meet the normal hardship criteria.
How long does a hardship withdrawal take?
It depends on your provider, but most applications take 10–15 business days once all documents are submitted.
Will early withdrawal affect my government contributions?
Yes. If you withdraw early under hardship, it can lower your account balance and affect future returns, including government and employer contributions.
Are there tax penalties on withdrawn funds?
Not directly. But you miss out on tax-free investment growth and may reduce your long-term balance significantly.
What alternatives exist for first-time entrepreneurs?
Consider small business grants, startup incubators, personal loans, or part-time freelancing to build up capital without using KiwiSaver.