New research has revealed that an alarming number of older Australians are entering retirement with mortgage debt and mounting bills.
New data from Council on the Ageing (COTA) Australia’s State of the Older Nation 2025 survey, released on 4 February, has shown that over-50s who may appear as asset-rich on paper are still struggling to keep up with day-to-day expenses as interest rates, house prices, and living costs rise.
The nationally representative survey, prepared by SEC Newgate Research, found that a minority of Australians over 50 are comfortable financially.
Just over a quarter classified themselves as “wealthy” (28 per cent), while one in four said they were living in poverty.
The remaining 47 per cent of older Australians said they were neither well off nor in acute distress – yet reported carrying high mortgage or rent obligations with limited saving buffers.
Almost half (48 per cent) of those surveyed said they believed life was “getting worse” at a general level, primarily due to steep cost-of-living pressures and their flow-on impacts on affordability of healthcare, aged care, and housing.
Hardship was not evenly spread, with those in various vulnerable categories experiencing far higher rates of poverty.
A total of 54 per cent of older renters said they were living in poverty, while 29 per cent of women, 40 per cent of those living with a disability, and 33 per cent living alone revealed they were below the poverty line.
They also reported worse overall physical and mental health and poorer access to healthcare.
Over half (54 per cent) of those who classified themselves as fully or partially retired said they relied on the age pension or other government benefits as their primary source of income – while more than a third (36 per cent) of older Australians reported having less than $100,000 in combined savings and investments.
One in five (18 per cent) said they had less than $10,000 in total savings and investments.
Housing tenure also remains a crucial dividing line, with around three‑quarters of older Australians living in a home they own – whether outright or with a mortgage, while close to one in five are in the private rental market.
Downsizing attractive – yet often out of reach
COTA’s research revealed that many older Australians are open to the idea of downsizing – particularly if it would reduce ongoing costs or free up capital.
Roughly one in five respondents (21 per cent) said they had already moved to a smaller or more manageable home, and a further 26 per cent said they were attracted to the idea in principle.
“More than half (54 per cent) of all home owners interested in downsizing felt it was likely they will move in the next five years, suggesting a sizeable pool of potential downsizers in the coming years,” the survey noted.
Yet for many, downsizing stalls at the planning stage, with older Australians presenting multiple financial barriers to downsizing, including stamp duty, transaction costs, the risk of higher council or strata levies, renovation expenses and potential effects on age pension entitlements.
Dianne Shepherd, chief executive of Homesafe Wealth Release, a debt-free equity release product for older Australians offered by Homesafe Solutions, said the data showed that over-50s “overwhelmingly” wanted to remain in their own homes, yet that downsizing was a financially daunting prospect.
“Financial barriers to downsizing mean selling the family home is often not a realistic or desirable solution,” Shepherd said.
Further, most older Australians said if they downsized, they would remain in the same city, town or suburb and, where possible, move into a standalone house (67 per cent) as opposed to an apartment (27 per cent) – requirements which sharply limit realistic options in a tight, expensive housing market.
However, a majority (77 per cent) said they felt reasonably secure in their current housing arrangements, despite the survey stressing that both affordability and security had deteriorated significantly since 2018.
Homesafe: ‘Wealth is locked in the home, not the wallet’
Homesafe Wealth Release said the COTA findings demonstrated that the core issue faced by older Australians was constrained incomes as opposed to a lack of assets.
Shepherd said the research matched what her team was witnessing on the ground.
“This report confirms what we see every day – many older Australians own their home, but are struggling to manage rising living costs.”
She said the findings should force a rethink of common assumptions about retirement security.
“We need to stop equating home ownership with financial comfort. For many retirees, their wealth is locked in their home while cashflow pressures continue to rise.”
Shepherd said the COTA data underlined that the most pressing constraint for a growing cohort of older Australians was not the size of their asset base, but rather how little of it they could actually utilise.
“This research shows the challenge facing older Australians is not a lack of assets – it’s a lack of accessible income,” she said.
“Policy, products, and public conversations need to reflect that reality.”
She added that the survey reinforced the case for solutions that support ageing in place as opposed to pressuring older Australians into “disruptive” housing decisions.
[Related: Gen X surpasses Boomers in property wealth holdings]
