A report released today by the Bankwest Curtin Economics Centre (BCEC), that addresses critical issues of population ageing in Western Australia, has found distinct differences between older people in Western Australia and the rest of Australia.
Findings showed that on average, older Western Australians are leading happier and healthier lives than older people in the rest of Australia. However, financially vulnerable groups still exist.
Professor Alan Duncan, BCEC Director, said Securing our Future was the sixth report in the BCEC’s Focus on Western Australian series. It brought new evidence to bear on a range of issues that affected the wellbeing of older Western Australians, from economic and social participation to health, wellbeing and quality of life, housing and aged-care, and financial security in later years.
“Securing the economic future of Western Australia will not only entail meeting the challenges – but also harnessing the opportunities – that population ageing brings to the State,” Professor Duncan said.
“The average Western Australian household aged 45 and over has a net income of $82,000 and net wealth of over $1.1 million. With the exception of the territories, older households in WA have higher mean income and wealth than the rest of Australia.
“From around the age of 30, Western Australians are more satisfied with their lives than other Australians, and this gap widens into old age.
“Beyond 40 years of age, residents of WA are generally more likely to report good health, and markedly less likely to report poor health, than those of the same age in the remainder of the country.”
The report highlights changing expectations among the baby boomer cohort surrounding the timing and nature of their retirement. Workers aged 45-55 are developing expectations of working longer, and at the age of 65, almost one-half of men and 30 per cent of women in WA are still working or looking for work.
“Changing retirement preferences among baby boomers includes not only retiring later, but also making a more staged transition out of the workforce,” Professor Duncan said.
“More mature age workers would like the option of a more gradual transition into retirement compared with current limited choices. Of those who have fully retired, almost half feel they have been pressured or forced into that position.
“Once unemployed, older people tend to have greater difficulty escaping joblessness, with the proportion of long-term unemployment among jobseekers higher for persons aged 55-64 than those aged 35-54.
“For discouraged workers aged 55 and over, around half indicated that their main motive for not looking for work was that they would be considered too old by employers.”
Even though workforce participation declines with age, it is important to value the unpaid contributions that seniors make to the Western Australian community.
Elderly Western Australians provide a considerable level of support to others through care for a spouse with a disability as well as other people’s children and through volunteering or charity work. The total amount of this support is around five hours per week per person.
Older Western Australians are more self-reliant on personal assets than in the rest of Australia, and housing assets remain critical to the retirement strategies and welfare of Western Australians.
Professor Duncan said older Western Australians were also more predisposed to using mortgage products to draw down the equity in their family home during housing market booms than older home owners in other states.
“Those approaching retirement in WA are more likely to expect to rely on income from property, savings, investments and business (22 per cent) to fund their retirement than the rest of Australia (14 per cent),” Professor Duncan said.
“However, somewhat concerning is the fact that only 33 per cent of older Western Australians expecting to retire have sought financial advice to help plan for retirement.”
The report also reveals that older Western Australians are more likely to have three to four spare bedrooms compared to older people living in other states. During 2001-2013, downsizing comprised 28 per cent of moves within the home ownership sector by Western Australians aged 45, compared to higher rates in other states.
Professor Duncan said downsizing could be encouraged by introducing stamp duty exemptions.
“The incidence of stamp duty on housing equity released through downsizing is much higher in Western Australia at 25 per cent, declining to 17 per cent in South Australia and 12 per cent in Queensland,” he said.
“However, any stamp duty exemption would need to be implemented alongside measures to promote greater diversity of affordable and appropriate housing stock within local areas so people can age in their local communities.”
The health of older Western Australians is also under the spotlight with the number of Western Australians with dementia estimated at 32,000. Advancing age is the key risk factor.
Professor Duncan said policies in relation to care would need to increase the support available to those who care for loved ones with dementia and other health conditions as the number of aged people grew.
The report cautions that despite higher average income and wealth, significant pockets of financially vulnerable groups exist within WA’s older population.
“The gap between the poorest and richest older households in terms of income and wealth is higher in WA than the rest of Australia,” Professor Duncan said.
“At over $3 million, the average net wealth of the top 20 per cent of older Western Australians is almost 40 times the wealth of the bottom 20 per cent (averaging $79,000).
“Western Australian home owners are also more likely to carry a mortgage debt beyond their prime working years compared to the rest of Australia.
“The use of debt that is unsupported by reliable income streams in retirement can be destructive, especially if a financial crisis arises, or in the case of a relationship breakdown or the onset of ill health.”
Almost one in five older Western Australians aged 55 and over are renting, and those not fortunate enough to own a home often face a severe rental cost burden in old age.
Women who have experienced marital breakdown or bereavement are over-represented amongst older renters. They are a particularly vulnerable group because in addition to owning no housing assets, they have very low levels of superannuation savings.
Western Australia will be home to over one million people aged 65 and over by 2050. The region with the highest proportion of people aged 65 and over (17.9 per cent) is Peel. Agricultural regions also have a markedly higher proportion of people aged 65 and over than the State overall – particularly the Great Southern (16.7 per cent) and Wheatbelt (16.1 per cent).
Professor Duncan said the impacts of population ageing in Western Australia would be felt most keenly by the Peel, Great Southern and Wheatbelt regions if the challenges of population ageing were not adequately addressed.
“Budgetary pressures from an ageing population will no doubt fall on both Federal and State governments, as responsibilities for differing areas related to ageing, such as health, are distributed across different tiers of government,” he said.
“It is therefore critical to ensure strong Federal-State coordination to deliver the best outcomes for the ageing population in Western Australia and indeed the whole of Australia.”
Key Findings:
The growth of the West
- Western Australia will be home to more than one million people aged 65 and over by 2050.
- The median age of Western Australians at the turn of last century was 26 years – the median age is now almost 36 years, and projected to rise to 40 by 2050.
- Today around 13 per cent of the Western Australian population is aged 65 years and older – this is projected to increase to over 18 per cent by 2050.
- WA has the lowest proportion of people aged 65 and over (12.8 per cent) and aged 85 and over (1.6 per cent) of all the States, although not as low as the ACT and NT.
- The region with the highest proportion of people aged 65 and over (17.9 per cent) is Peel.
- WA’s agricultural regions have a markedly higher proportion of people aged 65 and over than the State overall – particularly the Great Southern (16.7 per cent) and Wheatbelt (16.1 per cent).
- The Wheatbelt recorded the highest increase in the proportion of the population aged 65 and over between 2006 and 2011.
- Peel displays the largest increase in the share of people aged 85 and over.
Economic and social participation
- At age 65, nearly half of men (49 per cent) and three in ten women are either working or seeking employment.
- By age 70 around 20 per cent of men and 10 per cent of women are still either working or looking for work.
- Although participation rates are generally higher in WA than in the rest of Australia, the exception is for women between the ages of 27 and 40.
- Around a third of WA workers aged 55 to 64 would prefer to be working fewer hours than they do.
- Among workers aged 70 to 74, almost one in five prefer to work fewer hours.
- Older workers have a stronger preference for reduced hours as they age, but the lack of flexibility in choice of working hours may lead some to drop out of the labour market altogether.
- Once unemployed, older people have greater difficulty in returning to work, with the proportion of long-term unemployment higher for people aged 55-64 than those aged 35-54.
- More than half of those aged 55 and over who want to work but are not seeking employment are discouraged jobseekers, outnumbering those who gave personal or family reasons.
- For discouraged workers aged 55-69 and aged 70 and over, around half indicated that their main reason for not looking for work was that they would be ‘considered too old by employers’.
- Averaged over 2002 to 2013, elderly Western Australians provide support totalling around five hours per week per person for childcare, volunteer or charity work, or for the care of a disabled spouse or relative.
- Volunteering rates in WA are marginally above the national average for people aged 55 years and over, mainly to support sport and recreation, religious activities, and welfare and community organisations.
Health, wellbeing and quality of life
- The number of Western Australians with dementia is estimated at 32,000.
- The prevalence of dementia doubles every five years from around the age of 65.
- Co-resident primary carers of people with dementia are twice as likely as other co-resident primary carers to provide 40 or more hours of care per week.
- Older age Western Australians enjoy better health than their counterparts in the rest of the country.
- Around 20.4 per cent of Western Australians aged 50 to 54 live with long term health conditions or disabilities – this is 9.5 percentage points lower than the comparable rate for the rest of Australia.
- The positive health gap closes for older age cohorts in Western Australia.
- Rates of long term illness or disability rise from 41.9 per cent for those aged 65-69 (6.2 percentage points lower than for the rest of the country) to 62.7 per cent for among those aged 75 and over (only 3.5 percentage points lower).
- Beyond 40 years of age, residents of WA are generally more likely to report good health, and markedly less likely to report poor health, than those of the same age in the remainder of the country.
- From around the age of 30, Western Australians are more satisfied with their lives than other Australians, and this gap widens into old age.
- Average life satisfaction for Western Australians rises steadily from midlife – around 45 to 50 years of age – until beyond the normal retirement age of 75 to 79. Life satisfaction tends to fall only for those aged 80 years and over.
- Community engagement is substantially lower among older aged Western Australians compared to the rest of Australia – the rate is only one in five of those aged 65 and over living alone, less than half the national rate.
- Workers aged 45 to 55 are developing stronger expectations of working longer, with similar patterns for workers from WA and the remainder of the country.
- More than 20 per cent of people aged 65 to 69 regard themselves not to have retired, around half of whom continue to work in what they consider to be part retirement.
- More workers would like the option of a more gradual transition into retirement than currently have access to such arrangements.
- Of those who have completely retired, 46 per cent feel they have been pressured or forced to retire.
Housing and care needs in later life
- Around one in five WA home owners aged 55 to 64 have a mortgage debt secured against their home, a rate significantly higher than for home owners in the rest of Australia.
- The rate of renting in WA declines from 51 per cent among those aged 25-34 to 17 per cent among those aged 65 years and over.
- However, the rate of renting amongst older people aged 55 years and over is higher in WA than the rest of Australia.
- Women who have experienced marital breakdown or bereavement are over-represented amongst older renters.
- Renters aged 45-54 are much more likely than owners of the same age to be in financial stress.
- Older Western Australians are more likely to have 3-4 spare bedrooms than older people in the rest of Australia. This space under-utilisation may be linked to the mix of housing stock available in WA.
- During 2001-13, downsizing comprised 28 per cent of moves within the home ownership sector by people aged 45 years and over in WA as compared to higher rates in other States.
- The incidence of stamp duty on housing equity released through downsizing is much higher in WA at 25 per cent, declining to 17 per cent in South Australia and 12 per cent in Queensland.
- There is a clear positive association between age and the desire to continue living in the same area across Australia. However, this desire is not well matched by an adequate supply of affordable and appropriate housing in the locality that would allow older people to remain within their community.
- People aged 65 years and over with a health condition are less likely to modify their dwellings in WA (16 per cent) than in other states and territories. The propensity to modify the dwelling is highest in Victoria at 22 per cent.
- WA households are less likely to ask for assistance with activities across all States and Territories at 29 per cent.
- The rate of access to formal care is lowest in WA at 13 per cent amongst all States and Territories. On the other hand, there is greater use of informal care in WA than the rest of Australia.
- 72 per cent of people aged 65-84 who are in need of assistance in States outside WA are satisfied with the range of services available to them, compared to a noticeably lower 62 per cent in WA.
Financial security in older age
- The average Western Australian household aged 45 years and over is estimated to have net income of $82,000 and net wealth of over $1.1 million.
- With the exception of the territories, older households in WA have higher income and wealth than other States.
- The average income of the richest 20 per cent of households aged 45 years and over is 14 times the average of WA older households in the bottom quintile ($14,000).
- At an estimated average of over $3 million, the top 20 per cent wealthiest older Western Australians have wealth levels that are almost 40 times the wealth of the bottom 20 per cent ($79,000).
- The divergence between the poorest and richest older households is higher in WA than the rest of Australia.
- WA older households are more likely to be self-reliant on personal income than in the rest of Australia, though government pensions and allowances remain the main income source of Western Australians aged 65 and over.
- Housing remains the key asset in both WA and the rest of Australia. The primary home and other property represent 60 per cent of average household assets. Hence, housing assets are critical to the retirement strategies and welfare of Australians.
- Prospective retirees from WA are more likely to expect to rely on income from savings, investments, property and business (22 per cent) to fund their retirement than the rest of Australia (14 per cent).
- Only 33 per cent of prospective retirees from WA seek financial planning advice, compared to 36 per cent in the rest of Australia.
- There are clear correlations between the use of mortgage equity withdrawal by older home owners and the housing market cycle, particularly in WA. During the housing market boom of the early to mid-2000s, the increase in interest in mortgage equity withdrawal was more evident in WA than the rest of Australia.
- 16 per cent of Western Australians aged 45 years and over have low economic resource. The typical low economic resource older individual is more likely to be female (57 per cent), aged 60 or over (57 per cent), and living alone (56 per cent).
Full copies of Securing our Future are available from the BCEC website (www.business.curtin.edu.au/bcec) and upon request.
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Notes to editor:
The Bankwest Curtin Economics Centre is an independent economic and social research organisation located within Curtin Business School at Curtin University. The Centre was established in 2012 with support from Bankwest (a division of Commonwealth Bank of Australia) and Curtin University.
Selected charts from the report are provided with this release. Hi-resolution versions of all tables and charts in the report are available on request.
Information included in the report has been sourced from a range of data bases, including numerous Australian Bureau of Statistics products, the Property Council of Australia, FuelWatch, specialised commercial sales price data sourced from Landgate and information from the Department of Regional Developments Regional Price Indices.
