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Research has found that home ownership is perceived as the main driver of wealth in retirement among respondents.
Data collected from research commissioned by AMP has found that 40 per cent of respondents under 40 believe home ownership is the key contributor to wealth in retirement.
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The research, conducted by Dynata in February 2024, surveyed 2,000 Australians aged 50 years and over and 40 years and under to gain insights into their attitudes towards retirement and intergenerational wealth transferral.
Additionally, under 40s believed that investing in property (15 per cent) was the main contributor to generating wealth, along with savings (23 per cent), super (18 per cent), and shares (5 per cent).
The research indicated a sense of pessimism from under 40s in terms of property ownership, with four out of five who currently don’t own a property believing it will be out of reach, while the same number believed that not owning property will be a hinderance to their long-term wealth in retirement.
Overall, 90 per cent of respondents under 40 believed that owning a property is important for cultivating wealth.
AMP Bank group executive Sean O’Malley said that the research has clarified the concerns of under 40s relating to housing unaffordability and long-term wealth.
“…a justifiable concern given home ownership is one of the key pillars for wealth in retirement for most Australians,” O’Malley said.
“Building the financial confidence of retirees and finding better ways to unlock home equity would also empower more older Australians to support their kids.
“While this needs to be tackled at a macro level by federal and state governments, there are other, more immediate options for younger Australians wishing to purchase their first property. For example, AMP’s research has indicated a strong willingness of younger Australians to consider joint property ownership with family and friends.”
These recent findings follow the first phase of AMP’s intergenerational wealth research that revealed that while retirees want to support their children, they are concerned about their own financial security and lifestyle.
Four in five Australians aged 65 and over believed their children face similar or harder financial challenges than they did growing up, partially due to persistent cost-of-living pressures.
While three in four Australians in this cohort said it was important to pass wealth on to their children, the research showed that retirees hold a strong attachment to their family home and despite their desire to help, four in five aren’t prepared to sell up and downsize to release funds to their children.
To combat this, close to half of those aged 50 and over would consider passing home equity value to their children if they could stay in the family home.
[RELATED: Retirees consider passing home equity to children: AMP]
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