Housing costs hit retirees with mortgages

WELLINGTON: Retirees paying off mortgages are spending significantly more of their superannuation on housing costs, new analysis shows.

The Treasury research found that as home ownership rates fell, more than half of superannuitants paying off their mortgages spent more than 80% of their super income on housing costs.

Most retirees owned their home outright and most of those spent less than 20% of their super on housing costs.

It also said that by 2048, the number of people in their late 60s who were renting would double to 40%.

The research was commissioned by the Retirement Commission.

Commission policy director Suzy Morrissey said the results raised questions about the super payment and other forms of support.

‘‘Super remains absolutely vital for over 65s as a universal entitlement . . . and for many it’s all that they have.’’

Forty percent of current superannuitants had less than $100 a week in addition to their super, she said.

‘‘If those housing costs increase then there’s either a question about the rate of super — but that’s a very difficult consideration to look at that — so then you’re looking at additional support such as the accommodation supplement.’’

The accommodation supplement is paid to people who face high costs relative to low income.

‘‘It might be that we need to look at the accommodation supplement to see whether that’s really working for over 65s at the moment,’’ Ms Morrissey said.

The analysis comes as the commission works on a review of retirement income policies that will go to the minister of commerce and consumer affairs by the end of the year. — RNZ