“Despite Australia’s high rate of home ownership, for many superannuation and the age pension will not be enough to support them comfortably, especially in late retirement.
“If the government is genuine about making equity release a more prominent method of retirement funding, and addressing this gap, it needs to address low financial literacy in this area.
“In our report on reverse mortgages released today, we found most Australians don’t understand what equity release is, or the benefits of using products like reverse mortgages and home reversion to fund their retirement.
“Currently, equity release products – and reverse mortgages in particular – are often being used to pay out current debt, ahead of other uses such as home improvements to allow them to stay in the home longer, or for income support during their retirement.
“Australia also lacks a deep and diverse equity release market, with disjointed regulation between states and the federal government among several barriers to entry for innovative new products.
“This needs to change if equity release is to play a more prominent role in funding retirement in Australia.”
The full report Reverse mortgages: Financing ageing in place, is now available.

Dr Stuart Thomas is an Associate Professor in the School of Economics, Finance and Marketing at RMIT