Unlocking wealth from the family home as a means to fulfill a greater retirement has again entered the public discourse.
The Actuaries Institute has released a paper today that backs previous research suggesting the family home is not only a place to live, but also a store of considerable untapped wealth.
The Institute said governments should facilitate retirees' ability to access equity locked up in the family home due to doubts over the ability of superannuation to provide a sustainable and comfortable income for most Australians over the life of their retirement.
Institute president Lindsay Smartt said it is an emotional issue as many people do not see the family home as an asset to be consumed, but rather as something that can be bequeathed to their children or other family members.
"If they choose to, retirees can achieve a better standard of living if housing wealth is considered an integral part of their retirement plan. The overriding consideration of the Institute is that if retirees want to access their housing equity, it should be easy and safe to do so," Smartt said.
Among several points, the paper discusses potential partial protection (up to a cap) from the Age Pension means test for amounts accessed under home equity release schemes and downsizing. It also discusses regulatory protection for the elderly to help prevent financial abuse.
The report highlights other options for consideration by policymakers including a review of banking practices that constrain the provision of bridging finance to the elderly to make it easier for them to downsize.
The Institute noted that the paper "was not primarily concerned with reducing government expenditure on age-related services, though that is likely to be an outcome."