A growing proportion of retired Australians who fall on the age pension are likely to experience rental stress brought on by the inability to afford housing earlier in life.
That is the finding of a study by the Swinburne Institute for Social Research, which surveyed Australians about their financial situation and barriers to wealth, and found housing affordability a key determinant of financial hardship later on.
To afford a comfortable retirement, a single superannuant should have roughly $42,500 a year, according to the Association of Superannuation Funds of Australia (ASFA), but once rent is factored in, a single retiree on the age pension is more likely to be left with less than $10,000.
“Assuming full supplements and rent assistance, a single pensioner paying median market rent would have an annual after-housing income of $9,614.20,” the study found.
“A home- owning single age pensioner receives a little over 95 per cent of the ASFA modest retirement standard amount, but a single pensioner in private rental paying median market rent on a one-bedroom flat has, post-housing costs, the income equivalent of 41 per cent of the ASFA standard amount.”
The paper says the age pension is “seriously out of step with housing policy” and also calls for further fiscal measures to improve housing affordability, such as affordable rental housing schemes and curbing tax incentives for property investment.