25 Jul, 2019


CPD: The role of the Centrelink PLS in addressing Australia’s retirement funding challenge


Australia’s retirement income policy has been traditionally framed as having three pillars: superannuation, non-superannuation savings and the Age Pension. However, for many Australian baby boomers these three pillars provide inadequate resources to fund 25+ years of retirement. Will the government’s revamp of its Centrelink Pension Loans Scheme (PLS) fill the void? Household Capital discusses the important role home equity can play in retirement funding; it examines where the traditional bank reverse mortgages fell short and the role the Centrelink PLS and other strategies can play within a broader long term retirement plan.

Australians are living longer; since the introduction of compulsory super, Australian retirees have gained an extra decade of longevity. This extra time in retirement should be celebrated, but for many, there’s a major downside – a longer lifetime to fund.

Superannuation assets totalled $2.8 trillion at the end of the March 2019 quarter; despite this growth, for many people approaching retirement – or already retired – super came in partway through their working lives. With 3% contributions halfway through a working career, more than half of Australians retiring now have less than $200,000 in super – and that typically has to last more than 25 years.

To read the article, click here