Owning a house is supposed to shore up your retirement, but an increasing number of ageing Australians are struggling to pay off their mortgages.
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00:00Figures are showing that Australians aged 55 to 64 over the past 20 years who own their
00:08home outright has almost halved.
00:11So we're seeing far fewer people entering retirement who own their own home outright
00:15and don't have a mortgage.
00:17And the ABC's also obtained data from a rolling survey of 52,000 Australians.
00:23And I'll just reel off some stats from that.
00:25So the number of 55 to 65 year olds who planned to retire but then had to change their mind
00:31due to financial reasons has doubled in the past year.
00:35Those postponed retirements are most common in Victoria and New South Wales.
00:39And more than half of those people plan to either sell their home or draw down on their
00:44superannuation to pay off their mortgage.
00:47And that's concerning because superannuation wasn't created for people to pay off their
00:52mortgages later in life.
00:53It's to help people retire so they're not so reliant on the age pension.
00:57The more people draw down on their super to pay off their house, the more people we're
01:00going to have on the age pension.
01:02And that's a real conundrum for the federal government.
01:05And this is only really going to get worse because we know the average age of a first
01:09home buyer is getting older.
01:11So what are the possible solutions here?
01:14Well, a bit ironically for people who are entering retirement now, they do need house
01:20prices to at least stay where they are and not fall, because if people need to pay down
01:25their mortgage by selling their home and downsizing, buying another one, they need to sell that
01:30house at a price where they can give money to the bank so that their mortgage is gone
01:36and then also buy a smaller house outright.
01:38And that's really only going to happen if the value of their property stays the same.
01:43I spoke to a finance analyst, Martin North, a little earlier.
01:47Check out what he had to say.
01:49Most people don't go from fully working to fully retiring now.
01:53So what we are seeing is a more gentle gradation into retirement.
01:57And I would suggest that maybe there's an opportunity to think about how you flex that
02:03and how you perhaps allow people to work more hours and still get access to the pension
02:07and those sorts of things.
02:08So rather than just a whole as both of us move in the in the sort of the cliff age,
02:14I think there's an opportunity to restructure some of those things and actually help people
02:18into retirement.
02:20And there are already some incentives for downtraders who actually sell and get into
02:26a smaller property.
02:27I think governments should be thinking about that too and linking it back to the retirement
02:32age.
02:33The federal government is aware of this.
02:35They had an intergenerational report that was published last year that said there was
02:41a financial risk growing for the government with the sheer number of people that were
02:44retiring still owing money to the bank.
02:47But there hasn't been any moves yet by the government to address it.