Rising housing costs may be to blame for a 60 per cent increase in the number of people taking money out of KiwiSaver for financial hardship reasons, a research firm says.

Figures show the number of hard-up people who took money out of their retirement savings have risen from 10,666 in the year to June 30 2016 to 17,092 in the year to June 30 this year.

And the average amount people are taking out is also on the rise.

In the 2016 June year savers took out around $5565 each while this year the average was $6114 with the total amount increasing 76 per cent from $59.4 million to $104.5m over the last two years.

Jose George, general manager of Canstar New Zealand which carries out research on KiwiSaver providers, said it was not easy to take money out of KiwiSaver for hardship reasons.

"So it's safe to assume that for the people who have, it was done so as a last resort."

To qualify KiwiSaver members must clearly show they have been unable to meet daily living expenses such as mortgage repayments or urgent medical expenses for a dependent family member.

"It has not simply been on the desire for a new car or overseas holiday."

He pointed to rising housing costs as a driver for the increase.

"Statistics New Zealand information shows that in the last ten years weekly housing costs have increased 53 per cent yet wage increases are at 44 per cent.

"This may have contributed to the growing numbers of New Zealanders living payday to payday, only one unexpected bill away from financial disaster."

But he warned those that continued to put their retirement savings on hold may be losing out big in the longer term and he urged people to re-start contributions as soon as they could.

"Not contributing means potentially missing out on employer's contributions and member tax credits too and this will ultimately have a longer-term impact on the size of their retirement pot."

More than 135,000 people are on contribution holidays at the moment. People who have been in KiwiSaver for more than a year can take a break from contributing to it for five years before they have to re-apply.

A law change is currently going through parliament that would that reduce it to one year and change the name to savings suspension.

George said an employed person on an average salary of $51,000 a year could be down $15,470 over five years if they stopped contributions as they would miss out on the 3 per cent employer contributions and the government's annual member tax credit of $521.

Including the investment returns for an average balanced fund of 6.5 per cent per annum, the member could be down more than $18,000.

"Life can throw curve balls and KiwiSaver, although not designed for this purpose, has given thousands of people the opportunity to keep their heads above water.

"But, ultimately, KiwiSaver was designed as a retirement savings tool and more consideration given to how we can get people contributing again at the earliest possible opportunity."