Household Capital acquires government home equity scheme specialist Pension Boost to lead the Australian home equity retirement funding sector
Household Capital has announced its acquisition of an innovative home equity access start-up, Pension Boost.
Pension Boost takes the hassle out of the process of accessing the HEAS with Centrelink for its retiree customers. It has created a straight-forward proposition – it educates consumers on the HEAS, simplifies the application process, and undertakes all follow-up with the relevant government agencies. Since launch in 2019, Pension Boost has originated around 30 percent of HEAS applicants.
Household Capital CEO, Dr Joshua Funder, says the acquisition will enable Household Capital to provide a trusted ‘one-stop-shop’ service for Australian retirees to access their home equity to meet their retirement funding needs.
“The acquisition expands Household Capital’s proposition, widens its market reach and is consistent with our strategy to be the most trusted provider in the Australian home equity release market,” said Dr Funder.
“The combined business will position us to be the leading provider of home equity retirement funding. Together we play a critical role in meeting the needs of an ageing population, particularly as many Australian retirees have inadequate super saved to meet their needs.”
The government’s Home Equity Access Scheme is exhibiting similar growth rates to Australia’s home equity access market, currently circa 40 percent per annum, and is expected to become a more material component of the home equity market over time.
“2023 will be the biggest ever year in Australian home equity retirement funding, forecast at over $750 million – this is an inflection point in home equity as the third pillar of retirement housing and funding,” said Dr Funder.
Pension Boost was started by Paul Rogan, a renowned innovator having co-founded Retirement Essentials after a long career at Challenger. Paul will join Household Capital’s Advisory Board, to share his expertise and experience with Household Capital’s team.
Commenting on the transaction, Paul Rogan said, “It’s clear we both share the same ambition to cement home equity access as the third pillar of retirement funding.”
“Bringing the two businesses together establishes the leading platform for retirees looking to improve their retirement funding.”
“The combined platform also enables superfunds and financial advisers to support their retiree members or clients”.
Nick Sherry, Chair of Household Capital said, “The Pension Boost platform, Paul, and the team, extends our capability and will complement our mission to deliver scaled access to home equity.”
“We believe our proposition, together with superannuation and the Age Pension, provides the full package for retirees.”
Accessing home equity provides older Australians with flexibility and choice. It provides them the opportunity to get themselves ‘retirement ready’ by refinancing an existing mortgage or other debt or renovating their home to live comfortably and safely throughout retirement. Importantly, during times of market volatility, retirees can draw on home equity rather than income producing assets, preserving the longevity of those assets.
The acquisition of Pension Boost will enable Household Capital to help retirees, as well as retirement providers such as super funds, choose the best solution for them now and in the future as their needs change.
Household Capital Advisory Board Chair, Deborah Ralston, said, “Home equity is a large part of a retiree’s overall savings; the integrated platform that Josh, Paul and the team have created is an innovative way to access the third pillar of retirement funding.”
The acquisition will position Household Capital as the leading provider of home equity access in 2023.
“We are excited to bring the two businesses together to explore ways to help Australia’s retirees improve their retirement funding options with the best mix of products, interest rates and service,” said Dr Funder.