Seniors struggling to
Many retirees face worries about rent, mortgage debt and living with kids
Many Bay of Plenty retirees are still paying off their mortgage or high rents and debt while living with adult children and grandchildren.
Social and budget agencies say it has become the new norm for some elderly and housing is the biggest issue they face.
Figures from New Zealand credit agency Centrix shows nearly one in five superannuitants are managing a mortgage into retirement, averaging $155,555 each.
Median weekly rents in Tauranga and Rotorua had also rocketed to a November average of $550 and $450, according to Trade Me.
Rotorua Advisory Budget Service manager Pakanui Tuhura said in 2019/2020 they helped 17 retirementaged people who collectively owed debts of $810,000.
That comprised $285,000 in mortgages, $302,000owedto government departments, $73,000 in bank loans and $65,000 to finance companies and $46,000 to others such as family.
“Of the 17 we had in the latter year, three had a partner and 14 were single but virtually all had adult children and/or grandchildren living with them.”
Tuhura said unfortunately many elderly were too proud to ask for help and relied on “good old-fashioned Kiwi fortitude”.
“You can lead a horse to water but you can’t make it drink.”
Retirement Commissioner Jane Wrightson said it was important to remember the superannuation pension was not designed to include living costs.
It worked on the assumption people would have paid off their mortgage before claiming it.
But now, more would be reaching pension age with a mortgage, which was a concern, she said.
“That means people are having to work longer, which is not necessarily a bad thing, but it is a trend people need to be aware of and plan for. People need to be careful and it is crucial you have Kiwisaver and savings.” On the other hand, some were still paying rent and, traditionally, those people were at the lower end of the socioeconomic scale.
She said often the pension was the most stable and possibly the most income they had had for a very long time.
“So there are two very different trends here, but as long as they have secure rental accommodation generally speaking they may be all right.”
Age Concern Rotorua manager Rory O’rourke said housing was its number one concern.
“There are many situations that cause stress and declining health among the elderly but housing is the main concern.”
Some elderly who were struggling were often too proud to admit they needed help and “the world we live in is completely different to the world that many of our elderly grew up in”.
Most people could afford a house on a full section, which was paid for by retirement.
“Now, economic, social, and demographic factors are driving relentless change. As New Zealanders, we are living in different places, having fewer children, living longer and getting older, perhaps lonelier, and the idea of family is more fluid.”
Extended families living together was becoming more common and older people remaining in their home less common.
He said his advice to the younger generation was simple.
“It’s never too late to save for your retirement and, whatever else you do in life, strive to own your own home by retirement.”
Tauranga Budget Advisory Service manager Shirley Mccombe said ideally no one would go into retire
ment with debt, and it was seeing more wha¯nau supporting wha¯nau. “Managing large, unproductive debt is difficult at any stage of life but when you are in or approaching retirement it is devastating as time and income are not on your side. We also see people who are having to rent in retirement. As rents increase, it becomes untenable to remain in the property. Housing is expensive, people are losing jobs and they are returning home to live with wha¯nau who are often already struggling.” Mccombe said although accommodation assistance might be available from Work and Income, “it
will still cut into their money”. Salvation Army territorial media officer Louise Parry said the elderly seldom reached out for help as they tended to quietly press on through challenges and make do.
“That doesn’t mean that some aren’t finding it hard to make ends meet.”
She said a lot of the elderly that did reach out needed support finding a rental property as often they had never had to rent before or didn’t have references.
Centrix chief operating officer Mark Rowley said Centrix’s records reveal that of the 791,000 New Zealanders aged 65 and over, 135,000 have a residential mortgage.
“While many people aim to pay off their mortgage before retirement, this isn’t always possible, and it is important people think about how they balance their retirement savings with their mortgage payments.”
Retirement Commissioner Jane Wrightson.
Tauranga Budget Advisory Service manager Shirley Mccombe.