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What to do when the Age Pension isn’t enough

You may be able to top up your retirement earnings by unlocking the value in your home.

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More about Household Capital

  • Finance
  • Read Time: 5 mins

Key Points

  • Research suggests there’s often a shortfall between the actual amount of income from the Age Pension and the amount the retiree wants or needs to live the way they want to live.
  • It is estimated that more than $1 trillion in residential equity is held by retirees.
  • Household Capital’s Household Loan enables retirees aged 60 and over to access a portion of their home equity to improve their retirement funding.
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Nearly 70% of Australians who reach 67 will start their retirement on a full- or part-Age Pension.

The remaining 30% will start their retirements by funding themselves through a mix of superannuation, savings, investments, and other income sources.

At the current rate, the maximum single-age pension, including supplements, is $28,514 per annum, with couples receiving $42,988.

However, according to the Choice/Super Consumers Australia index, the expenditure level for a homeowner can range from $34,000 to $55,000 for singles, and from $48,000 to $81,000 for couples.

In other words, there’s often a shortfall between the actual amount of income received from the Age Pension and the amount the retiree wants or needs to live the lifestyle they want and deserve.

As a result, many homeowners are looking towards their greatest asset – the family home – as a means to fund retirement.

Value in your home

In capital cities, the family home has a median value of $912,000. This compares with median superannuation balances of $180,000- $190,000 at time of retirement.

It is estimated that more than $1 trillion in residential equity is held by retirees.

In fact, Australian retirees are the wealthiest retirees in the world...and the greatest source of wealth is in their home. The family home is the greatest source of retirement wealth most people aren't using.

Such wealth can be accessed through the Australian Government Home Equity Access Scheme, reverse mortgage providers, and some other partial home sale or wealth release arrangements.

In Australia, reverse mortgages come with world-leading legislated protection such as: statutory loan-to-value ratios, no negative equity guarantee, lifetime occupancy, and you remain 100% the owner of your home.

About Household Capital

Household Capital is an Australian-owned independent retirement funding provider founded in 2016 with a mission to help retired Australians “Live Well At Home”.

HHC offers retirees a responsible, sustainable and flexible financial solution that allows them to unlock the wealth in their home to achieve their retirement goals while continuing to live in the home they love.

Household Capital’s Household Loan is available to Australian homeowners aged 60 plus. This wealth can be used to establish an additional regular income stream to supplement the Age Pension, as well as provide capital to meet larger and often unexpected expenses, such as home maintenance or medical costs. 

Home wealth can also be used to improve retirement housing, purchase a safe and reliable car or fund in-home or residential aged care. Many of Household Capital's customers love the peace of mind that comes from establishing a contingency fund to meet their future needs.

Importantly, home wealth can also support intergenerational wealth transfer, enabling a gift to children when they need it most for a first home buyer deposit or for education costs.  

You have earned it. Now you can take control and live the retirement you deserve, today and tomorrow.

For more information: 

Download the free e-guide 6 Ways to Use Your Home Equity.

Or use Houlsehold Capital's Home Equity Calculator to calculate the equity in your home.

Prefer to speak to a real person? 

Speak with one of Household Capital’s retirement specialists for a 15-minute no-obligation call on 1300 699 624.

Or book a time that suits you to ask questions and discuss your needs. Schedule a call.

Sources: Treasury, CEPAR  

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Disclaimer: Applications for credit are subject to eligibility and lending criteria. Fees and charges are payable, and terms and conditions apply (available upon request). Household Capital Pty Limited ACN 618 068 214, Australian Credit Licence 545906, is the Servicer for the credit provider Household Capital Services Pty Limited ACN 625 860 764.

National Seniors Australia Disclaimer: This content includes sponsored advertising which helps fund our important advocacy work. Please note that the information provided and opinions expressed in this advertising material are solely those of the advertiser. We encourage you to carefully evaluate and consider any advertised offering before making a purchase. Any transactions or interactions between you and the advertiser are solely between you and the advertiser.

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