- One in three say their super will last less than five years if they retire while renting
- Six in ten already under housing stress, spending more than 30% of income on rent
- Most housing and retirement policy still assumes Australians own their home
A Home in Place survey of renters aged 55-69 has revealed a growing group of Australians entering retirement with high housing costs, limited savings and little protection.
The findings highlight how exposed people are when they reach retirement age without owning a home in a system that assumes they will.
A group overlooked by housing policy
The survey of 772 renters aged 55-69, commissioned by not-for-profit housing provider Home in Place, shows an extremely bleak outlook for their retirement.
Martin Kennedy, Home in Place’s Group Executive Manager, Marketing & Public Affairs warns that there is a huge hole in Australia’s retirement system.
“Our system assumes people will have low housing costs in later life because they will have paid off a mortgage. But there are at least 750,000 Australians who will hit retirement age in the next decade who are not homeowners. That is a recipe for disaster.”
Home in Place’s research revealed some concerning findings:
- Almost one in five (18%) renters in their 50s and 60s do not believe they will ever retire
- Some 27 per cent expect major financial stress in retirement
- Just 8 per cent of respondents expect a comfortable retirement
- A third (34%) say their super would last less than five years if they had to rely on it while renting
- Four in ten (42%) say they definitely could not afford to rent privately on the Age Pension
- Six in 10 currently spend more than 30 per cent of their income on rent, which puts them in the housing stress category. A third spend more than 40%.
- More than half (52%) are already cutting back on groceries and social connection, 25% are cutting healthcare and medication
- Almost three quarters (73%) worry about becoming housing insecure in later life
- One in five already feel insecure in their current home
“These results are shocking, but not surprising. Lack of home ownership is one of the strongest predictors of poverty later in life. These results prove Australia is facing a reckoning we are simply not ready for,” said Mr Kennedy.
“What we pretend is true in Australia is that by the time you reach retirement you will own your home and have very few housing costs. The pension assumes it. The superannuation system assumes it. Our entire housing policy apparatus assumes it. But many Australians in their 50s and 60s are still renting and facing the full force of a private rental market that was never designed for people entering retirement.”
“According to the Australian Taxation Office, the median super balance for people in this age bracket is between $170,000-$210,000.
“Median rent alone in any capital city will absorb this entire amount in less than a decade. Throw in escalating living costs and the whole lot could be gone in the blink of an eye.
“When a third of people tell us their super will last less than five years, that is not a retirement. That is a countdown,” Mr Kennedy said.
“The choice many of these people will face is between a life of demeaning poverty, or working until they drop.”
Work is no longer the safety net it once was
The research shows that renters in their 50s and 60s who are still working face a difficult labour market. Nearly half (47%), do not feel confident they could find steady employment if they needed a new job and a third (32%). say they have been overlooked for work because of their age.
When asked what they would do if they could no longer afford their rental home, respondents nominated options such as moving to a cheaper area, using temporary accommodation or moving in with family.
“More than a quarter said they didn’t know what they would do. That in itself is a huge worry,” said Mr Kennedy.
A strong call for government action
The survey found overwhelming support (80%) for increased government investment in social and affordable housing.
“For around 750,000 Australians, the retirement system is simply not fit for purpose. We need more social and affordable housing to avoid disaster.”
One in Ten: A call to action
The release of the findings comes as Home in Place continues its One in Ten campaign urging governments to commit to making at least one in every ten new homes social or affordable housing.
“One in Ten is a simple, achievable step that would make a profound difference,” said Mr Kennedy.
Media inquiries: Susan Redden Makatoa, 0403 870 383 [email protected]
