Despite new Federal Budget measures aimed at easing cost-of-living pressures, many Australian retirees continue to struggle financially. Financial experts are now highlighting home equity release as a potentially valuable tool for seniors seeking to maintain their standard of living without selling their homes.
The 2025 Federal Budget has introduced several initiatives targeting older Australians, including tax cuts reducing the 16% tax rate to 15% next year and 14% by 2027, resulting in savings of $536 annually for the average taxpayer when fully implemented. Additionally, households will receive extended energy bill relief of $150 this year.
Healthcare measures include an $8.5 billion allocation to increase bulk billing for doctor visits and a reduction in PBS medicine prices from $31.60 to $25, expected to save households over $200 million annually starting in 2026. The Medicare levy low-income thresholds will also rise by 4.7% from July 1, 2024, benefiting over one million Australians.
However, for many retirees, these measures may not be sufficient to address their financial challenges. Industry analysts point to the family home as a significant untapped resource that could provide additional financial stability.
Financial advisors suggest that accessing home equity can help retirees supplement their income, manage rising healthcare costs, fund necessary home improvements, assist family members, or eliminate existing debt.
“With increasing numbers of Australians retiring from paid employment with outstanding housing debt, home equity release can provide funds to extinguish debt to enable ongoing home ownership,” according to industry experts.
However, financial planners caution that releasing home equity comes with considerations. The decision reduces the value of assets passed to heirs, may affect eligibility for government benefits like the age pension, and should align with long-term housing plans, including potential transitions to aged care facilities.
As cost-of-living pressures continue to impact retirees, combining government initiatives with personal financial strategies like home equity release may offer a more comprehensive approach to maintaining financial stability in retirement.
