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Household Capital closes Series B financing with strategic investment from UK’s Legal & General

Josh Funder   CEO - Household Capital
March 10, 2020 2 MIN

10 March 2020:

Household Capital has announced the completion of a Series B financing, with UK global asset manager and financial services provider Legal & General acquiring a 20 percent stake in the Australian company. Existing and new investors joined Legal & General in the Series B financing, which takes the total amount of equity capital raised by Household Capital to $25 million since launching in 2017.

Legal & General’s strategic investment, Household Capital’s first non-domestic, multinational investor, will be used to underpin the Australian home equity retirement funding provider’s corporate growth, and build on its early success.

Legal & General – a leading provider of insurance, annuities and lifetime mortgages in the UK and a global asset manager with close to £1.2 trillion in assets under management – is dedicated to helping institutions and individuals in all phases of pension and retirement planning. Household Capital will benefit from this deep understanding of retirement markets, asset management and market leading experience of equity release and product innovation.

Joshua Funder, Chief Executive Officer of Household Capital, said, “Legal & General’s strategic investment shows when it comes to tackling the challenge of our burgeoning retirement-age population, global investors see Australia as a significant market opportunity.”

“We’re excited to have an investor on board with experience in this market segment and who recognises that Household Capital is an innovator in home equity retirement funding with a clear values-based focus on customer outcomes.”

Chris Knight, Chief Executive Officer of Legal & General Retail Retirement said, ‘‘This is a great opportunity to invest in a dynamic business, in a market with lots of potential. It reflects our commitment to improving the opportunities available to everyone at retirement, regardless of where they may be, so that they can live longer, healthier and happier lives.”

“The Australian equity release market is extremely promising, with Household Capital at the forefront of developing innovative funding options for retirees. We’re looking forward to working together to help grow the scale of the business so that consumers have better options at this critical life stage.’’

Series B fundraising

The Series B fundraising will enable Household Capital to continue to meet its growth objective; to provide retired Australian homeowners with solutions to their increasingly complex retirement funding needs.

The funds raised will be used to grow Household Capital’s team, to enable the business to continue to provide the high quality personalised service for which it’s become known. It also plans to expand its offering of innovative home equity retirement funding solutions, increase its marketing footprint and continue to invest in technology.

Legal & General and incoming Series B investors join the company’s initial investors, including ME Bank, which holds both an equity stake and has provided Household Capital’s initial debt facility.

Combined with its strong digital offering, local market expertise and innovative wholesale debt structure, Household Capital will continue to meet its growth objectives, providing retired Australian homeowners with solutions to their increasingly complex retirement funding needs.

Nick Sherry, Chair, Household Capital and former Federal Minister for Superannuation and Corporate Law said, “It is a myth that Australians downsize. They want to continue to live in their homes and in their community.”

“Drawing down part off the capital in their home can help many retirees achieve their objectives and maintain a good lifestyle.”

“Our investors know that growth in home equity retirement funding is not only necessary – it’s inevitable.”

Applications for credit are subject to eligibility and lending criteria. Fees and charges are payable and terms and conditions apply (available on request). Household Capital Pty Limited is a credit representative (512757) of Mortgage Direct Pty Limited ACN 075 721 434. Australian Credit Licence 391876.

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Call us free today for a chat on   1300 622 100

Household Capital partners with National Seniors Australia

Josh Funder   CEO - Household Capital
September 25, 2019 1 MIN

25 September 2019:

Household Capital, an independent, specialist retirement funding provider, and National Seniors Australia, the peak advocacy body for older Australians today announced a partnership.

The two organisations have each recognised in the other a determination to improve the retirement outcomes for Australians. National Seniors is the voice of older Australians, fighting for a fair go in later life. Household Capital is focused on giving Australian retirees flexibility and choice. Through its Household Transfer®, retired Australians can draw on the savings in their home, as well as their superannuation and Age Pension, to improve their retirement funding.

National Seniors

National Seniors partners with a diverse group of carefully chosen organisations who share its values and commitment to helping older Australians enjoy later life. Powered by its members, it carries out world-class research and advocates on the issues that matter – all while curating a menu of specialised member services to make everyday life even better.

 Professor John McCallum, Chief Executive Officer and Research Director, commented, “Our research has found one of the keys to a comfortable retirement is financial flexibility. “We look forward to growing our partnership with Household Capital for the benefit of our members and supporters who now have greater choice when it comes to funding their retirement,” he added.

Household Capital

Household Capital provides responsible long term access to home equity to meet the needs of an ageing population. It provides flexibility and choice to improve the wellbeing and lifestyle of Australian retirees and support them to Live Well At Home.

Dr Joshua Funder, Chief Executive Officer, said, “We’re delighted to work with National Seniors, a group which is well known for its advocacy on behalf of older Australians.”

Major retirement funding need

Since launching in March 2019, Household Capital has verified a strong need for improved retirement funding among Australia’s retirees.

“Australians are living longer but many do not have enough super savings to provide sufficient income throughout retirement,” said Dr Funder.

“We’ve fielded calls from financial advisers, brokers and aged care advisers, as well as individuals, looking to access home equity for a range of purposes.”

Applications for credit are subject to eligibility and lending criteria. Fees and charges are payable and terms and conditions apply (available on request). Household Capital Pty Limited is a credit representative (512757) of Mortgage Direct Pty Limited ACN 075 721 434. Australian Credit Licence 391876.

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Call us free today for a chat on   1300 622 100

ME Bank and Household Capital establish $100 million innovative wholesale home equity funding facility

Josh Funder   CEO - Household Capital
April 11, 2019 2 MIN

11 April 2019:

Household Capital, an independent, specialist retirement funding provider, and ME Bank, an industry super fund-owned Australian bank, have announced a partnership establishing a $100 million wholesale debt facility.

The terms of the facility are innovative and designed to meet the major unmet financial needs of Australian retirees who plan to continue living at home.

ME Bank holds a minority equity stake in Household Capital.

Needs-based finance innovation

Australians are living longer but many do not have enough super savings to provide sufficient income throughout retirement.

“Retirees want to stay at home, but many are struggling to make ends meet as they age,” said Josh Funder, Managing Director of Household Capital. “Our goal is to deliver a values-based service to help Australian retirees Live Well At Home.

“We fill the gap left by the banks and offer flexible solutions for retirees to meet their retirement funding needs from a combination of superannuation, the savings in their home and their Age Pension.”

This Household Loan is designed to meet the needs of Australian retirees by allowing them to balance their savings, continue to grow their assets during retirement, and harvest a sustainable income from their investments.

Home equity supports a wide range of needs

Household Capital provides Australian home owners access to additional retirement funds by using a low interest rate loan to transfer a portion of the value of their homes into their superannuation fund or an investment account.

Home equity can also be used to fund in-home care and support the transition to aged care. This approach also enables the transfer of home equity between generations to fund first-home buyers’ deposits and educational expenses.

“Household Capital has expanded access to home equity, improved the customer experience and established new sources of finance,” said Jamie McPhee, Chief Executive Officer of ME Bank. “We are pleased to work with such an innovative group to transform the lives of Australian retirees.”

Lowest available rate

Household Capital and ME Bank’s innovative approach to wholesale funding and building strategic partnerships means Household Capital can offer Australia’s lowest available rate to retirees needing to access their home equity.

“Our approach is more efficient and specific to the needs of retired Australians,” said Mr Funder. “This enables Household Capital to mitigate risk when it’s occurred and offer retirees a significantly lower rate.

“Traditional bank reverse mortgages charged around 6.4%. Since the banks withdrew from providing access to home equity for Australian retirees, many remaining providers have increased their rates even higher.

“Working with ME Bank to deliver more efficient and responsible access to home equity, we are able to provide a rate of 5.9%.”

Withdrawal of the banks

Traditional bank reverse mortgages were not always aligned with the long-term housing and income needs of Australian retirees and did not provide genuine retirement funding adequacy and certainty.

Overall the reverse mortgage market in Australia remained static at around 35,000 outstanding loans and up to a $3.5 billion portfolio for the past decade before entering a decline associated with the withdrawal of bank providers. The end of 2018 saw the last of the bank reverse mortgage providers close their books, with both Commonwealth Bank and BankWest ceasing to write new business.

“The banks have pulled out, however nearly one trillion dollars of home equity savings owned by retirees remain potentially available, yet largely inaccessible, to support improved retirement incomes,” commented Nick Sherry, Chairman of Household Capital.

“We provide responsible and flexible access to lifetime savings, allowing retirees to make sound, longer-term economic and lifestyle choices.”

Applications for credit are subject to eligibility and lending criteria. Fees and charges are payable and terms and conditions apply (available on request). Household Capital Pty Limited is a credit representative (512757) of Mortgage Direct Pty Limited ACN 075 721 434. Australian Credit Licence 391876.

Phone Icon

Call us free today for a chat on   1300 622 100