Home ownership is becoming increasingly difficult for retirees. Picture: iStock

The Australian Centre for Financial Studies’ Expenditure Pattern in Retirement shows about 15 per cent of retirees are renting property and about eight per cent are still paying off a mortgage well into retirement.

The report, commissioned by the Australian Institute of Superannuation Trustees and released today, found that retirees who did not own their home outright were struggling.

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One in four retirees has either a mortgage or is paying rent on a home. Picture: SuppliedSource:Supplied

The average rental cost in 2014 was $220 per week or about $11,500 per year, and for many retirees that was about 40 per cent of expenditure. Another eight per cent are still paying off a mortgage.

The report also showed that retirees with a lower income were spending more than they earned, while those on higher incomes were having to be conservative with their cash.

Australian Institute of Superannuation Trustees chief executive officer Tom Garcia said it was concern retirees were finishing work with debt.Source:News Corp Australia

The AIST chief executive officer Tom Garcia said it was a “concern” so many people were starting their retirement buried in debt.

“It’s a concern that one in 12 people are starting off their retirement with mortgage debt as this may limit their ability to draw an adequate retirement income if super is being used to pay down debt,’’ he said.

“Traditionally, high rates of outright home ownership for older Australians have helped cushion the impact of other expenses in retirement.”

The report showed retirees with a mortgage are more likely to have one at the beginning of their retirement life as opposed to later down the track.

Ipac certified financial planner Patrick Canion said it was a “worry” that retirees entered retirement without having paid off a home.

“Still having a mortgage when you want to retire indicates that people haven’t formed good money habits,’’ he said.

“Paying rent is the same, but it is even worse if you are on a low income, or part or full pension.”

Consumer finance expert Lisa Montgomery said the lack of home ownership was a concern with an “ageing population.”

Consumer finance expert Lisa Montgomery is concerned at the lack of home ownership with an ageing population. Picture: Supplied.Source:Supplied

“What do they do when they go into care, how do the pay for that if they don’t anything to fall back on in terms of equity in their property and having paid off a home loan,’’ she said.

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