Household Capital releases 2020 Retirement Outcomes survey

08 October 2020:

Household Capital releases 2020 Retirement Outcomes survey

Household Capital has today released the results of their 2020 Retirement Outcomes survey, one of the first major national studies of its kind since the impacts of COVID-19 have hit.

The Household Capital 2020 Retirement Outcomes research was conducted for the organisation by trusted advocates, Your Life Choices. Over 4,400 Australians participated, representing over 87 percent of the Australian population by postcode. With 91 percent of participants over 60 years of age at the time of the survey, this work is some of Australia’s most comprehensive retiree research.

The survey results are released in advance of next week’s 2020 Household Capital Third Pillar Forum, where leading industry figures and advocates will discuss trends in an aging population, retirement funding (from all sources), aged care and housing.

Survey results

Most older Australians:

• want to remain living in their own home
• are not confident that they have sufficient retirement funds
• do not want to access their superannuation prematurely

Contrary to the popular story that retirees like to downsize, 73 percent of homeowners aged over 60 wish to remain in their own home. This was true of respondents from all geographic areas of Australia, and of both men and women.

Confidence in having adequate funds to live at home is low, with only a quarter of people feeling ‘very confident’ that they have sufficient funding to live well in retirement.

Dr Joshua Funder, Chief Executive Officer of Household Capital, said, “Most older Australians wish to remain in their  home throughout retirement, but 74 percent are not confident they have adequate retirement funding and no one wants to access their super prematurely.”

COVID-19 has seen those in more financially comfortable lifestyles impacted more highly. Half of those self-identifying as ‘generous but secure’ when describing their retirement lifestyle indicated they now feel far less secure. This compares to almost all of those identifying as ‘frugal but secure’ still feeling secure.

Although COVID-19 has challenged both the health and economic circumstances of many retirees, only a tiny 0.4 percent are planning to access their superannuation early. In the face of low equity yields, respondents want to minimise the negative impacts of any premature superannuation withdrawals.

According to Funder, “The Household Capital Retirement Outcomes survey clearly shows that the family home is not just the preferred retirement housing but also by far the biggest store of retirement savings.”

Respondents indicated a median home value which is 4.5 times the value of their superannuation balance (with other assets making up only 3 percent of their wealth). City dwelling retirees hold an even greater proportion of their wealth in their home property; metropolitan areas showed a higher variance and Sydney residents have homes which are 6.2 times their superannuation balance.

Funder said, “Older Australians are among the wealthiest in the world. They have been great investors and savers, diligently accumulating capital in their home. And almost everyone is aware of the role  home equity can play in helping to fund their retirement.”

82 percent of the average person’s wealth is held in the capital value of their home, rather than in a more accessible superannuation portfolio. 67 percent of retirees own their home outright, and a further one in eight people hold a mortgage. The superannuation system started at three percent contributions midway through the span of the baby boomers’ working lives, meaning that for this age group, superannuation represents a smaller percentage of retirement savings.

Fortunately 92 percent of people are aware that monies saved in the form of “household capital” can be used to assist in funding retirement.

2020 Third Pillar Forum

The 2020 Third Pillar Forum will bring together senior executives and policymakers, local and international industry experts, as well as thought-leaders and academics across superannuation, wealth management and advice, housing and care, to explore the important themes that together meet the needs of Australia’s retirees.

The 2020 Third Pillar Forum will be a virtual event consisting of a live panel discussion, online Q&A, video keynote presentations and recorded interviews.

The full Third Pillar Forum 2020 will be released online at noon on Wednesday October 14, 2020 at householdcapital.com.au/third-pillar-forum.