Jo-Anne Allen is approaching her 67th birthday and should be looking forward to retirement after overcoming a terminal cancer diagnosis. Nearly ten years ago, a liver transplant saved her life, but it also significantly depleted her superannuation funds. As a single mother and grandmother, she finds herself among a growing number of Australians entering retirement while still renting.
Demographer Simon Kustenmacher, co-founder of The Demographics Group, labels this situation a “looming crisis,” pointing out that many individuals are increasingly excluded from the housing market. “If you’re renting in retirement, it’s essential to have a substantial nest egg to cover your monthly expenses,” he remarks.
Statistics reveal a troubling trend in Australia’s retirement landscape, which is traditionally based on the assumption that older adults will own their homes by the time they retire. However, this is becoming less common. The challenges faced by lifelong renters like Ms. Allen have been highlighted through the ABC Your Say initiative. Data from the Melbourne Institute’s Household, Income and Labour Dynamics in Australia (HILDA) Survey indicates that the percentage of renters aged 65 and older has increased from 4.6% to 9.4% between 2001 and 2024.
Ms. Allen is concerned that she may never be able to retire or afford her rent. Currently, she pays $690 per week for a three-bedroom home in Wallsend, near Newcastle, New South Wales. “When I had cancer, I took unpaid leave for three years and went from earning $1,500 a week to just $580 a fortnight on sickness benefits. I had to tap into my superannuation to get by,” she shares.
Diagnosed with liver cancer in 2016, Ms. Allen underwent a life-saving liver transplant in 2017, just before transitioning to palliative care, where she was expected to live for only a month. Now, even though she views her second chance at life as a “miracle,” she states, “I definitely can’t afford to retire.” She continues to work out of fear of not being able to pay her rent, recently signing another four-year contract in her government job. “While I’m working, I have some security, but I know there will come a time when I simply can’t work anymore,” she adds.
Fiona York, executive officer of Housing for the Aged Action Group Inc (HAAG), notes that many older Australians are retiring while still renting, which means they lack housing security and often spend over 30% of their income on housing, leading to financial stress and living in substandard conditions. Research commissioned by HAAG from Swinburne University of Technology highlights that older Australians face increasing housing instability, particularly those renting privately. The study found a 73% rise in older renters between the 2011 and 2021 censuses, with a significant portion of them earning low incomes.
“We frequently hear about individuals moving into unsuitable housing that isn’t safe or relocating from urban to regional areas, only to find that living costs are not lower and essential services are lacking,” Ms. York explains.
Carole Strong, a 71-year-old resident of a suburb in Adelaide, has rented since selling her home 40 years ago following her divorce. Living on a pension supplemented by rent assistance, she spends over 80% of her income on rent. Frustrated and concerned about her future, she reached out to the South Australian government. “I’m too old to keep moving every few years, which is taking a toll on my physical and mental health. I feel caught between a rock and a hard place,” Ms. Strong expressed in her letter.
As a retired social worker, she feels disheartened by her limited housing options and urges the government to address the challenges faced by many older women like herself. “The discussion around ‘downsizing’ annoys me. Many of us never really had the chance to upsize. The assumption that everyone owns a home is misguided. We just want a safe place to live within our means,” she asserts.
This situation is becoming increasingly difficult. Research from Super Consumers Australia indicates that a single retiree who rents requires double the amount of superannuation to maintain the same standard of living as someone who owns a home in retirement. Their findings reveal that a single retiree renter would need approximately $659,000 in superannuation, compared to $322,000 for a homeowner. For couples, the numbers are $786,000 versus $432,000.
Katrina Ellis, deputy CEO at Super Consumers Australia, highlights the vulnerabilities of retirees who rent, as their superannuation is often depleted by rental costs. “Renters will face tough choices and may experience a diminished quality of life in retirement, which contradicts the purpose of our retirement system,” she states.
Dr. Ellis emphasizes that the solutions extend beyond superannuation adjustments. “The government needs to enhance Commonwealth rent assistance and invest in more public housing to support individuals with limited financial means and retirees who are renting,” she concludes.
