According to the 2023 Intergenerational Report, Australia is experiencing a profound demographic shift with a rapidly aging population. As Australians live longer, the nation faces the challenge of ensuring financial security and well-being for seniors during their retirement years.

The report’s projections reveal that Australia’s population is expected to grow more slowly in the next 40 years, averaging just 1.1% annually, down from the 1.4% growth seen in the previous four decades.

This shift will result in a population of 40.5 million by 2062–63 that is distinctly older than before. The number of Australians aged 65 and over is set to more than double, while those aged 85 and over will triple, and centenarians will increase six-fold.

With people living longer, there will be an increase in demand for care and support services, particularly in the 85 and over age cohort, and it is predicted that the workforce may need to double to meet this demand in 2049-50.

An ageing population also means that any retirement savings such as superannuation will need to be stretched further, increasing the need for finance solutions to supplement income and assist with funding aged care in future.

The family home is still the largest asset held by Australian households, making up 37% of net household wealth. Experts believe this is an underutilised source to support living standards in retirement, so finding a way to access this wealth could be a solution.

Although downsizing could allow you access some of the wealth in your home, there can be physical, mental and financial impacts and many retirees have a preference to age in place – that is, to remain in their current home compared with moving into specialised care, or moving at all.

Could a Heartland Reverse Mortgage help?

A Heartland Reverse Mortgage has been designed for the needs of people over 60. It could provide you with funds to help you live a more comfortable retirement while continuing to own and live in your home for as long as you choose, benefiting from any potential increase in value.

As everyone’s needs in retirement are different and also change as you age, Heartland offers a range of product options (including an Aged Care Option for residential care), drawdown options and loan purposes that can be tailored to suit you. We can even lend on your investment property, or refinance a mortgage (even a reverse mortgage!).

Unlike traditional mortgages, there are also no monthly repayments with reverse mortgages. The loan including interest is instead repaid when the homeowner sells the house, moves into aged care, or passes away.

Providing retirees with another pillar to fund their retirement through financial products like reverse mortgages has the potential to address some of the pressing needs of our rapidly ageing population discussed in the 2023 Intergenerational Report.

If you would like to apply for a reverse mortgage, arrange a face-to-face meeting with an accredited broker, or have any questions, please feel free to get in touch.

 

Ageing population information sourced from the Australian Government’s Treasury Department, 2023 Intergenerational Report: https://treasury.gov.au/sites/default/files/2023-08/p2023-435150.pdf

Information provided is accurate as of 1 November 2023 and may change from time to time.

Subject to complying with the terms and conditions of the Heartland Reverse Mortgage, you will not owe more than the net sale proceeds of your home and you can keep your home for as long as you choose. There is no assurance that property values will increase over time, and property values may also decline.