The Fourth Pillar – The Role of Home Equity Release in Retirement Funding


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Funding the retirement of senior Australians is topical against a backdrop of escalating age pension payments and health costs, increasing longevity, inadequate superannuation savings and growing numbers of people retiring before they have extinguished housing debt. There is surprisingly little focus on the role that home equity could play in retirement funding.

Our retirement income system is generally viewed as comprising three pillars: the age pension, compulsory superannuation and voluntary savings. Home equity represents a substantial additional pool of savings, and could be viewed as a fourth pillar. This pillar exists today but does not currently play a significant role in retirement funding.

This seminar considers the potential for home equity release to become a meaningful fourth pillar of retirement funding. Some of the challenges to be overcome in achieving this will be outlined.

The family home is not just a place to live but also a store of wealth. This wealth can be released by simply selling the home, but this creates the problem of where to live. Downsizing might work for some people. Alternatively there are products which facilitate the separation of the ‘place to live’ and ‘store of wealth’ attributes.
Releasing more of the equity that senior Australians hold in their homes, whilst they still live in their homes, could allow a more comfortable retirement for many and might help to address the issue of sustainability of the age pension system.

The topic of home equity release has been touched on in a number of public policy contexts in recent times, and some of these will be covered too.

About the Speaker
Christine Brownfield is an actuary working at Homesafe Solutions, a company providing a debt free equity release product to senior Australians. Through Christine’s work at Homesafe she developed an interest in the home equity release field. Her paper “The Fourth Pillar – The Role of Home Equity Release in Retirement Funding” received the Melville Financial Services Prize from the Actuaries Institute, following its presentation at the Institute’s 2014 Financial Services Forum.
Prior to joining Homesafe, Christine worked in actuarial, finance and strategy roles at ING Australia (now ANZ Wealth) including five years as Chief Actuary. Christine has also worked as a consultant with Tillinghast-Towers Perrin and in actuarial roles at Norwich Union.

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