Household Capital, an independent, specialist retirement funding provider, yesterday welcomed the federal government’s revamped Pension Loans Scheme (PLS). Dr Joshua Funder, Household Capital’s Chief Executive Officer, commented: “Australian retirees need better funding solutions.”
“The PLS revamp sees the government acknowledge the critical role home equity can play in long-term funding retirement.”
Living longer means new approaches are required
Australia’s retirees are living longer, with many facing the prospect of outliving their retirement savings. Although the Centrelink administered PLS has been available for twenty-five years, it’s had limited take up.
The changes that come into effect today will make the Centrelink PLS more widely available to Australians of Age Pension age who qualify for a full or part eligible pension. The new arrangements will allow most home-owning pensioners to access an amount up to 50 percent above the full pension.
According to Dr Funder, Australian retirees really value their pension and they really want to stay at home; retirement funding strategies that support this are important.
Government endorses use of home equity
Since its official launch in March 2019, Household Capital has verified a strong need for improved retirement funding among Australia’s retirees.
“We’ve fielded calls from financial advisers, aged care advisers and direct clients looking to access home equity for a range of purposes,” said Dr Funder.
“The federal government has endorsed our approach – many Australian retirees do need to responsibly access their home equity to meet a range of needs.”
Although the Centrelink PLS provides for an enhanced income stream, it does not provide for all retirement funding needs.
“One thing we know is that there’s no ‘average’ retiree,” said Dr Funder.
“Retirees need to plan long term to meet their funding, housing and aged care expenses. Improved income is great but does not address retirees’ capital needs; you can’t cover major expenses from the pension.”
Household Capital provides Australian homeowners flexible access to capital. This may include income, improved housing, contingency funding for unexpected expenses or funding the transition to aged care.
“We provide retirees with personalised service, flexibility and choice,” said Dr Funder.
“Retirees have a wide range of needs and, working alongside the Centrelink PLS, we can help senior Australians to better meet their retirement funding needs.”