Paul Stratton
While many retirees have substantial investments, drawing down on them in volatile markets isn’t optimal. Home equity is a viable alternative to drawing further on super or other savings, or meeting retirement needs when savings are exhausted.
For homeowners, home equity can be used to provide funding for:
- refinancing an existing mortgage or other debts in retirement
- increased retirement income to deal with cost of living pressures
- aassisting children to access the property market or to pay the grandchildren’s school fees
- home renovations or modifications so they can safely and comfortably remain in their family home
- a new car
- in-home care or the transition to residential aged care.
The Pension Boost acquisition
Late last year, Household Capital announced the acquisition of Pension Boost, an innovative home equity business that helps its customers access HEAS. This acquisition enables Household Capital to distribute both its Household Loan and the government’s HEAS, selecting the product most appropriate for financial advisers’ clients to draw on their home equity to improve their retirement funding.
For those clients with modest needs, such a small amount of extra income or a lump sum payment to cover minor expenses, the government’s HEAS is a great, lower cost option that’s available to both pensioners and self-funded retirees.
For those clients who require a higher level of income or capital for more substantial projects or expenses, a Household Loan offers the flexibility to borrow more. The maximum loan amount was recently expanded to $2 million.
“The acquisition of Pension Boost means we can offer advisers’ clients even more flexibility and choice,” said Paul Stratton, Household Capital’s Chief Distribution Officer.
“Home equity, together with superannuation and the Age Pension, provides the full package for retirees and helps mitigate longevity risk; the fear of running out of money in retirement is very real for many retirees.”
Credit team appointments
Household Capital has also bolstered its Credit team with two senior appointments late last year.
The first appointment was Anthony Nolan as Head of Credit. Anthony is a very experienced and commercial credit manager from NAB, where he held a number of senior credit roles over a 27-year period. We also welcomed John Ardiles, a senior credit specialist with more than 18 years credit and sales experience.