Household Capital fast tracks funds for retirees in need
May 2020: Retirees facing financial shortfalls will be able to apply for ‘accelerated access’ to draw on their home equity, after independent specialist retirement funding provider Household Capital overhauled its product features and application process to meet the needs of senior Australians during the COVID pandemic.
Household Capital today announced the ‘rapid access contingency’ $20,000 home equity offer to deliver financial assistance more rapidly to the thousands of retirees hit hard by the global economic downturn. The company also announced the Household Capital Home Income, a regular drawdown on home equity to allow retirees to maintain their retirement lifestyles.
Household Capital chief executive Josh Funder said the rapid funding would provide a financial boost for retirees facing a loss of income due to falling dividends, term deposit rates and rental income.
“We know retirees are doing it tough and facing reduced incomes due to shrinking super balances and investments.” “The Government stimulus package focused on working Australians and while the banks have provided interest repayment holidays, none of that has helped retired Australians get through the crisis.”
“Stepping up to offer $20,000 to cover living expenses or help out kids or grandkids who have lost jobs in the pandemic is the right thing to do, at the right time,” Funder said.
Applications for the $20,000 finance package and Home Income will be fast tracked, with the funds typically available within two weeks. Regular interest repayments are not required, and applicants can pay back the money at any time without financial penalty. In contrast, applications for the Federal Government’s Pension Loans Scheme must be made through Centrelink, with estimated wait times of up to nine months, and payments only available in twice-monthly instalments.
“We don’t want people to have to wait – they need access to their savings to meet their current needs as well as fund their long-term retirement,” said Funder.
“Smaller loans like these are not profitable to originate in a business sense, but we view it as a service to make sure Australian retirees have access to their savings when they really need them.” Home equity is the third pillar of retirement funding. Drawing on home equity when other sources of income are reduced is a sensible option when you consider most Australian retires have much more saved in their homes than in their super or investments.
In total, Australian retirees have $1 trillion tied up in home equity. Freeing up some of those funds from their largest retirement asset enables them to continue to live well in their own home and, just as importantly, in their community.
“We have certainly experienced a surge in inquiries in the last couple of months, so I think retirees who are now spending more time at home than ever are realising the value of their home, seeing where they can make improvements or accommodate their future ageing needs, so they can remain in their home for longer,” said Funder.
“It’s becoming clear to retired Australians that their homes are both the best place to live as well as the best way to fund their retirement.”
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.