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A specialist lender has launched a new offering that not only enables Australian retirees to tap into the equity in their home to access a regular income stream, but also makes provision for lump sum payments – setting it apart from other schemes currently available.
Household Capital's new drawdown loan facility, Household Transfer, was developed in response to “strong demand” from financial advisers looking for flexible solutions that enabled their clients to secure a regular income stream in addition to a lump sum payment as part of their retirement funding.
Joshua Funder, Household Capital CEO explained, “There are various expenses which can arise in retirement so we have developed a flexible funding solution which can be tailored for these individual requirements whatever they may be.
“We find most people looking for a regular drawdown also take a lump sum for a specific purpose, such as renovations, a new car, medical expenses or to provide financial support to children and other family members.
“As the average age of Australia’s population continues to increase, so does the need for innovative funding solutions to support this demographic shift."
Household Transfer also gives retirees the choice to receive their income fortnightly or monthly, at “highly competitive” interest rates.
According to the lender, an estimated 439,000 Australians intend to retire in the next eight months despite average savings being well below the recommended level. Australia’s median household superannuation balance at retirement is approximately $200,000 yet the median value of home ownership at retirement is $700,000.
The lender’s household loan was originally launched in March, helping elderly home-owners access additional retirement funds via a low interest rate loan, transferring value from their homes into their superannuation fund or an investment account.
The offering is designed to help retirees balance their savings, grow their assets into retirement, and benefit from a sustainable income.
