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Meeting the needs of older Australians

14 October 2021

A comfortable retirement out of reach for many

The global population is ageing. In Australia, the proportion of those aged 65 and over increased from 12.4% in 2000 to 16.3% in 2020 – this is expected to grow as more baby boomers (people born between 1946 and 1964) turn 65.

However, managing the cost of retirement is becoming increasingly challenging. While more people are entering retirement, the cost of living continues to increase, as does the Retirement Savings Gap – the shortfall between the retirement income of working Australians and the income they need for an adequate retirement.

The Australian government’s pension is a core pillar of retirement income and the main source of income for most Australians aged over 65. As at July 2021, a retiree living alone receiving the maximum basic pension rate receives $868.30 fortnightly, and a couple receives $654.50 each fortnightly. This equates to an annual single person income of $22,576, or $17,017 for each person in a couple.

According to the Association of Superannuation Funds of Australia Retirement Standard, for a retiree to live a modest lifestyle (with only the basics), they would need $28,514, or $41,170 for a couple. This demonstrates that living a modest, let alone comfortable, lifestyle is often not possible on the pension alone. It is clear to see from these figures that additional financial support is needed to allow this age group to live more comfortably in retirement.

Increased financial support is needed

Recent research and the 2021 Australian Federal Budget reinforce the need for increased financial options. In May 2021, the Australian Federal Government announced various commitments to support people in retirement and to reform the aged care system. Funding commitments included increased pension contribution allowances for those wishing to downsize, support for older Australians to access aged care, and support to receive in-home care.

Further to this, research by RMIT University, supported by Heartland, found that the majority of older Australians wish to age in place – that is, ageing in their current home compared with moving into specialised care, or even moving at all. So, while options to support downsizing may suit some, it’s not the preference for most.

Though 90% of older Australians wish to age in place, 29% say they will not be able to afford the changes required to make their home aged-friendly.

Reverse Mortgages a solution to enable ageing in place

Limited superannuation and the rising cost of living is restricting the ability to age in place. RMIT University suggested expanding the ‘traditional’ three pillars of retirement funding (pensions, superannuation and private savings) to include equity release options – a market that is predicted to more than triple over the next decade. This notion was supported by the Federal Government in its Independent Retirement Income Review Final Report which observed that “individuals can significantly boost their retirement incomes without having to increase their superannuation contributions [by] …accessing equity in their home”.

In 2013-14, 85% of people aged 65 and over were homeowners. For the majority of those homeowners who wish to remain in their home, an equity release option, such as a reverse mortgage, could be their solution.

Heartland has seen significant increase in demand for Reverse Mortgages, with enquiry levels in Australia for FY2021 increasing by 31% compared with the previous corresponding reporting period. The way in which customers are using their reverse mortgage strongly reflects the financial needs of this demographic – 46% are used for home improvements, 41% for debt consolidation, 20% for car repair or replacement and 16% for extra income.

As Australasia’s leading provider of reverse mortgages (with market share in Australia increasing from 26% to 29%), there is substantial opportunity for Heartland to support more older Australians to live with more financial freedom in retirement.

Heartland’s award-winning reverse mortgage has helped more than 22,000 Australians to release equity from their homes. Its Aged Care Reverse Mortgage is also one of the few specialist aged care loan products available in Australia, with as much as 50% of the home’s equity available to release for upfront or ongoing aged care costs.

The future of retirement finance

As more Australians are reaching retirement than ever before, and with an increasingly high cost of living, Heartland recognises that some people may need to access funds sooner than retirement age, or need a one-off lump sum to fund an immediate need as they move towards retirement, or in retirement. Age requirements for Heartland Reverse Mortgages were recently expanded to enable senior Australians to access funds sooner as they transition into retirement – applications can now be accepted for couples where someone aged 60 or over has a partner aged 55-59. In February 2021, Heartland also launched its new Well-Life Loan to help those 60 and over to get an extra financial boost when taking their next step in life, without having to mortgage the family home.

Heartland is committed to innovation in financing the needs of Australians entering and in retirement. This includes servicing customers at each point of the ‘technical maturity’ spectrum – allowing customers to access information and retirement finance via convenient and accessible digital channels. Recently this has included the development of educational digital animations, embedded e-signing for loan documents, improvements to our online application, and consideration into the development of a mobile app to allow customers to more easily access and manage their loan.

With A$1.25 billion in aggregate available to support Heartland’s growth aspirations, our aim is to more broadly service the needs of the aged sector in Australia through a diversified product offering to a wider demographic, including exploring options to provide more simplified equity release options and products which support entry into various stages of aged care.


  • Ageing, Global Issues, United Nations,
  • Twenty years of population change, Australian Bureau of Statistics,
  • Australia’s cost of living over the last decade, Australian Parliament House,
  • Advisory Street 2020, Australia’s National Saving Update: Beyond 2020, Report to FSC and MLC, Sydney.
  • Age Pension, Services Australia, Australian Government,
  • ASFA Retirement Standard, The Association of Superannuation Funds of Australia,
  • Reverse mortgages: Financing ageing in place, RMIT University,
  • Global Equity Release market forecast to more than treble by 2031, The European Pensions and Property Asset Release Group, news/global-equity-release-market-forecast-to-more-than-treble-by-2031.
  • Retirement Income Review Final Report, The Australian Government the Treasury (November 2020).
  • Trends in home ownership in Australia: a quick guide, Australian Parliament House, TrendsHomeOwnership.
  • APRA ADI Property Exposure and Heartland Reverse Mortgages data as at 31 March 2020.

Information provided is accurate as of 14 October 2021 and may change from time to time.