- Nearly 29 per cent of the older people believe they will not be able to afford the changes needed to make their homes age-friendly.
- Rising costs and limited superannuation are affecting the ability to fund ageing.
- Need to expand pensions, super and private savings, along with equity release options such as reverse mortgages to help senior Australians.
Even as the large majority of the older Australians want to stay in their homes for as long as possible, rising costs and limited superannuation are affecting these changes while providing for a comfortable living. However, the solution to the problem could be reverse mortgages, according to a report related to financing ageing in place by Heartland Group Holdings Limited’s (ASX: HGH) subsidiary Heartland Australia Group Pty Ltd with RMIT University (Royal Melbourne Institute of Technology).
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Nearly 90 per cent of senior Australians say they want to remain in their current home as against moving into specialised care, the report said. Thirty-six per cent of the senior Australians live in a place which is not suitable for ageing and needs renovations. Nearly 29 per cent of the older people are of the view that they will not be able to afford the necessary changes to make their homes age-friendly, the report added.
While nearly 25 per cent say that they could afford the costs, 40 per cent are unsure if they could afford aged care costs in the coming years. Thirteen per cent of the respondents have plans to sell their family home to fund their retirement.
Heartland’s Australian reverse mortgage receivables surged to $957.5 million up by $149.1 million or 18.4 per cent in the financial year ended 30 June 2020. The company secured long-term funding of $142 million in September 2020. In aggregate, the company now has access to committed Australian reverse mortgage loan funding worth $1 billion.
Considering a surge in the number of senior Australians entering retirement with debt, RMIT research suggests that there is a need to expand the scope of pensions, super and private savings. The research also says that equity release options such as reverse mortgages could help people fund the cost of retirement and facilitate ageing in place.