Affordable housing and financial prospects for age pensioners are not promising.
The Australian Bureau of Statistics (ABS) has calculated the housing costs of older Australians and, unsurprisingly, those who own their home are sitting pretty compared to private renters.
According to the ABS, the average housing cost of a homeowner aged 65 and over is around $38 per week, compared to $103 per week for those who live in social housing and $232 for private renters.
The Conversation conducted interviews with older Australians who don’t own their home to see how they managed their household expenses. It was interesting to read just how pensioners who live in social housing are able to manage their money. Some of them are even able to save and still engage in modest leisure activities.
The interviews revealed that tenants who live in social housing pay, on average, around 25 per cent of their income in rent, leaving them a good amount of ‘disposable’ income. Social housing tenants also enjoy a general feeling of security, as older tenants are typically guaranteed security of tenure.
One such tenant, John, is very grateful for social housing, saying: “I’m quite content and I think it’s just wonderful that the Government does supply these houses.”
Unsurprisingly, the ones who don’t manage their money well are usually the people who drink or smoke a lot, or who have an illness that requires expensive treatment or medicine.
On the other hand, private renters reliant on the Age Pension often live in a state of anxiety and insecurity. The anxiety is caused by the strain of making ends meet after using a large proportion of their income to pay rent, while the insecurity stems from knowing that, once their lease ends, they could be asked to leave their home.
Janet, who was a private renter for years, spoke to The Conversation after she had just been accepted for social housing.
“I was absolutely, well, I sat down and cried. I literally sat down and cried because I felt like, well, at least I had the protection of the Department of Housing whereas before of course I didn’t have any of that. I had no protection whatsoever …”
These interviews highlight the need for affordable and secure housing for older Australians who don’t own their home. There is simply not enough social housing in Australia to cope with our ageing population and the widening chasm between the rich and poor.
A single person receiving a full Age Pension would have $438.55 per week. Once the average rent of $232 is paid, they would have $206.55 left for living expenses, including bills and food. That’s around $29.50 per day.
Most Australians who currently receive a full Age Pension are homeowners, but there’s still a good proportion of those who rent. Our Retirement in a Digital World survey shows that 32.5 per cent of those surveyed receive a full Age Pension. Just over 70 per cent of those surveyed own their home, with around 13 per cent renting.
However, with housing becoming increasingly unaffordable for the average Australian, this trend will change over the coming years. Soon, the number of Australians who will rely solely on the Age Pension and who do not own their own home will have a significant effect on the economy.
Regardless of the economic effects, living in secure and affordable housing is fundamental to the overall wellbeing of all Australians. Having a place to call home is essential for living a decent life, creating social connections and developing a sense of community.
In 2015, 817,300 Australians lived in social housing. This number has doubled since 2008, but there are still around 200,000 on the social housing wait list. More than half the tenants in social housing are either aged 55 and older, or children the age of 14 and under. Around 53 per cent of social housing households are single people living alone.
Last week’s agreement between the state and territory governments that could result in rental and community housing becoming more affordable and readily available will no doubt be welcomed by the hundreds of thousands on the social housing wait list.
Almost 10 per cent of people aged over 65 and over 20 per cent of those aged 55 to 64 who live by themselves are private renters. Most of the 55-to-64 age cohort that hit retirement age within the next 10 years will be reliant on the Age Pension.
It doesn’t take a genius to do the maths. The financial and housing prospects for many age pensioners are bleak to say the least. Social housing may make that future a little brighter.
Are you an Age Pensioner who pays rent? How do you manage? Do you feel secure? Have you applied for social housing? How was/is your experience?