Media release: 2 February 2026
Complaints are leading to a spike in financial disputes, reports Financial Services Complaints Limited (FSCL). The Financial Ombudsman Service reports a 41% increase in disputes in the first half of the reporting year. A total of 235 disputes were opened between July and December, up from 167 in the same period the year prior.
“The increase reflects wider economic challenges that many New Zealanders continue to face,” says Financial Ombudsman, Susan Taylor. “We expect high dispute levels to persist as long as economic conditions remain difficult for many”. The rise also signals consumers’ growing awareness of dispute resolution services and their willingness to challenge financial providers and demand accountability.
“Disputes are complaints we investigate to negotiate solutions between consumers and their financial services providers,” adds Ms Taylor. Many complaints are resolved before they reach this stage.
KiwiSaver hardship withdrawal rejections are the greatest contributing factor, as people seek help with paying their bills, but are unaware of the difficulty in meeting the hardship requirements under the KiwiSaver Act.
“People often don’t realise how strict the KiwiSaver rules are, leading to complaints about declined applications,” says Ms Taylor. “We see people with ideas about using their KiwiSaver for longer-term financial relief”, she says, pointing to a recent case where a woman wanted to withdraw KiwiSaver funds to buy a tiny home, rather than renting, but was only able to secure a smaller, short-term financial solution.
“We understand this is frustrating when you need financial security, but KiwiSaver savings are meant for your retirement,” says Ms Taylor. “You can’t access your funds before retirement, except for a few limited exceptions, and this is reflected in the Act, rules and industry guidance”.
Ends
Notes to Editors
Read the case note: https://fscl.org.nz/case-studies/kiwisaver-withdrawals-strictly-limited/
Disputes numbers
| Category | Jul-Dec 2025 | Jul-Dec 2024 |
| Fund managers (managing KiwiSaver withdrawals) | 31 | 5 |
| Trustee companies | 16 | 10 |
| Transactional service providers | 27 | 18 |
| Insurers | 31 | 23 |
| Lenders | 77 | 73 |
| Card issuers | 27 | 32 |
| Financial advisers | 26 | 40 |
| TOTAL | 235 | 167 |
