Older Aussie renters at ‘greater risk of financial stress’ than home owners

In future, fewer retirees will own their own homes. Source: Getty.

According to new research, older Australians are one of the fastest-growing groups of renters in Australia with an increasing number of retirees forking out for rented properties.

Findings published in the Grattan Retirement Incomes Model (GRIM) state that older Aussies are “falling off the housing ladder”, and predict the situation will only continue to worsen for younger generations as they age.

“Falling home ownership rates among younger generations mean many more retirees in future won’t own their homes,” the report reads.

Read more: Aussie seniors the forgotten victims of housing affordability crisis.

Senior Australians in the private rental market are described as being “at greater risk of financial stress than home owners, or those in public housing”, according to the resource created by the Sydney-based Grattan Institute.

It also states that while most retirees can look forward to a comfortable retirement, with current retirees reporting lower stress levels than those in employment, retirees in the rental market are said to be “struggling”.

Read more: Think tank wants home-owner pensioners squeezed to close housing gap.

Brendan Coates, Grattan Institute senior policy advisor, said Rent Assistance needs to be raised to help retirees with a low-incomes to manage their rental fees. He said: Retirees of today — many of whom didn’t benefit from compulsory super contributions for their whole working lives — already feel more comfortable financially than younger Australians. And pensioners who own their homes are less likely to suffer financial stress than working-age Australians.

“But our retirement incomes system doesn’t work for everyone. Senior Australians in the private rental market are at much greater risk of financial stress than homeowners, or those in public housing. 

“Falling home ownership rates among younger generations mean many more retirees in future won’t own their homes. The rate of Rent Assistance therefore needs to increase to help low-income retirees that don’t own their home.”

Coates added that Commonwealth Rent Assistance would need to be boosted by around 30 per cent in order to ensure retirees who rent have an “adequate or comfortable retirement”.

Read more: The Age Pension was introduced 110-years ago – ‘it’s time to modernise it’.

Joel Pringle, from The Benevolent Society, echoed the calls to increase Commonwealth Rent Assistance, stating that the current payments are not adequate in relation to the high costs associated with private rentals.

He said: “There is an unwillingness to take on the complexity and challenges of the housing system itself. Private rent is too high we need to increase rent assistance, but they (the government) have avoided doing that even though that could help people living on age pension who are experiencing poverty the most.”

What are your thoughts on this story? Do you live in rented accommodation? 

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

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