Two in three retirees who hire privately owned houses stay in poverty and the issue will worsen, a brand new report has discovered.
Most older working Australians who hire should not have ample financial savings to maintain paying hire of their retirement, in response to the report from the Grattan Institute.
Greater than half of households aged 65 and older who hire report a complete web monetary price of lower than $25,000, in contrast with simply 6% of house owner households of that age.
Grattan’s Brendan Coates mentioned Australia was failing too many retirees who hire.
“The report really identifies that while most retirees are doing pretty well – they’re actually more financially comfortable than many working-age Australians – it’s retirees who rent who are really struggling,” Coates mentioned. “And they’re in a lot of strife.”
There are greater than 200,000 retired Australian households renting within the non-public market, of which 67% reside in poverty. Poverty charges amongst single males and single girls are even greater, at 74% and 78% respectively.
Between 1981 and 2021, dwelling possession charges among the many poorest 40% of 45- to 54-year-olds fell from 68% to 54%.
Coates mentioned this quantity would proceed to dive. “This problem is going to get worse,” he mentioned.
“Home ownership is falling, and it’s falling fast. Today’s older renters who are in work are tomorrow’s renting retirees.
“We’re going to see more people renting in future, and many renters are not on track to have enough savings through their super to cover the cost of rent.”
Coates known as on the federal government to carry commonwealth hire help, which dietary supplements the age pension for much less well-off retirees who hire.
“The problem now is that social housing is also a smaller share of the housing stock,” he mentioned.
He mentioned Australia’s earnings assist system “hasn’t updated for this emerging reality, which is that more people are going to rent”.
The federal government has lifted the utmost price of hire help (now $211.20 for singles) by 27% – over and above inflation – prior to now two budgets.
However even after these will increase, a single retiree who depends solely on earnings assist can afford to hire solely 4% of one-bedroom houses in Sydney, 13% in Brisbane, and 14% in Melbourne.
