Crisis looms for retirees: Rising rents and low savings putting older Australians at risk

A new report has uncovered an alarming trend: a rising number of older Australians are at risk of homelessness, with retiree renters being left behind in an increasingly fragile housing market. And according to the Grattan Institute, the situation is set to get worse.

The research paints a grim picture, with two in three retirees who rent in the private market living in poverty and half of older renters with less than $25,000 in savings.

With minimal savings, many older renters are faced with an uncertain future, one in which they may no longer be able to afford rising rental prices during their retirement.

The situation is particularly dire for the poorest 40 per cent of renting households between the ages of 55 and 64 who have less than $40,000 in net financial wealth.

“Today’s low-income renters are tomorrow’s renting retirees,” the report said.

Brendan Coates, the lead author of the report, is calling on the federal government to take immediate action by boosting the Commonwealth Rent Assistance (CRA) scheme. He urges a 50 per cent increase for single retirees and a 40 per cent boost for couples, with payments also being indexed to keep up with inflation.

While the Federal Government has already raised rent assistance by 27 per cent over the last two budgets, the reality is that even with these increases, many retirees are still being left behind. For example, a single retiree relying on income support would only be able to afford 4 per cent of one-bedroom homes in Sydney, 13 per cent in Brisbane, and 14 per cent in Melbourne.

A proposed increase of $53 per week for singles and $40 for couples would help retirees afford the cheapest 25 per cent of one-bedroom homes in Australian capitals, according to the think tank’s findings.

“Australia is failing too many retirees who rent,” Coates said.

“Only a further substantial boost to rent assistance can ensure that all Australians get the dignified retirement they deserve.”

Patricia Sparrow, CEO of COTA Australia – the leading advocacy organisation for older people – echoed Coates’ concerns, stressing that “the current system is allowing too many retirees to fall through the gaps”.

“Two in three retirees who rent live in poverty. That’s a shocking statistic that we can’t continue to ignore,” Sparrow said.

“For older single women the figure is even worse, with 80% of single retired women living in poverty.

“The Federal Government needs to initiate an independent government-funded review of demand side housing assistance schemes, including the Commonwealth Rent Assistance scheme, as part of a suite of housing and cost of living policies.”

While the housing market is challenging for all ages, Sparrow stressed that for those on fixed incomes such as retirees, many of whom have inadequate savings, the situation is reaching a crisis point.

“Everyone deserves to live with dignity in retirement, but the fact that we’ve got two in three retirees who rent in the private market living below the poverty line shows that’s simply not happening,” Sparrow said.

“We know the largest group at risk of homelessness in Australia at the moment is older women. To allow the current situation to continue unchecked would be to turn our backs on retirees who are falling through the cracks right before our eyes.”

-with AAP.