Retirees feeling let down by retirement income system
Retirees do not feel adequately supported by the current retirement income system, leaving the door open for the government’s retirement review to better consider measures such as compulsory retirement income products and incentives to tap into the equity in their home, according to Household Capital.
In its submission to the retirement income review, the retirement funding provider shared research it had conducted with retirement information portal Your Life Choices, which surveyed around 4,700 retirees and found that around 75 per cent did not feel fully supported by Australia’s retirement funding system.
Household Capital listed a number of reasons why the current generation of retirees did not fell supported by the system, including that retirees were living longer while feeling like an economic burden, that baby boomers had not significantly benefited from the super system and that there were not significant structures available for retirees to leverage the equity in their home.
The firm’s chief executive, Josh Funder, said by helping retirees to better access home equity for retirement funding, several important areas of social and economic policy could be addressed.
“Retirees are a large group with significant inaccessible wealth in home equity and major unmet needs in consumption for wellbeing,” Mr Funder said.
“By unlocking home equity to improve retirement funding, we can enhance both the quality of life in retirement and economic activity.”
In its submission, Household Capital suggested the recently introduced downsizer contributions measure be extended to include all forms of home equity release.
“This improved policy would support ageing and help the economy with no additional tax expenditure,” the group said.
Household Capital also suggested the government make it compulsory for all super funds to offer “a comprehensive retirement income package” to members, with product options including home equity funding to ensure retirees were better able to adequately fund their retirement.
“The federal government must support the retirement funding sector to deliver better outcomes in retirement,” Mr Funder said.
