Baby boomer divorcees face homeless risk

MIDDLE-CLASS DIVORCEES risk poverty and homelessness as they grow older, according to new research from the Salvation Army.

By InvestSMART · 18 Oct 2011

By InvestSMART ·
18 Oct 2011

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MIDDLE-CLASS DIVORCEES risk poverty and homelessness as they grow older, according to new research from the Salvation Army.

Women over 40 who return to renting may never get back into the housing market, said the study's author, Swinburne University's Dr Andrea Sharam and if their career path has been "mummy tracked" by periods of part-time work and maternity leave, they probably don't have enough superannuation. By surveying 111 Victorian women over the age of 40 who did not expect to own their own homes before retirement, Dr Sharam discovered that 77 per cent were still renting, even though 79 per cent had tertiary degrees, 76 per cent were employed and their median income was $50,000.

"It's not about low income, it's about your life course," said Dr Sharam. "You can do remarkably well, but as soon as you divorce, it's a different story."

Two-thirds of the women surveyed expected to have $100,000 or less in superannuation at retirement. More than half (53 per cent) were in debt, and even those earning over $70,000 had minimal savings.

Dr Sharam called on councils and welfare organisations to invest in community "land lease" schemes where crown or private land is lent to low-income housing developments. Many of these women could raise the deposit for a $150,000 investment, Dr Sharam said, but none could afford a house or flat in today's market.

The number of financially vulnerable older women is expected to jump dramatically as baby boomers reach retirement age. Women are already reaching their 60s with half the superannuation of men. The number of women living alone is growing rapidly and expected to reach 1.8 million by 2013. And women have been marrying and starting families later in life. "That's part of the problem, they've got younger children when they divorce," said Dr Sharam. "Women do tend to get the house and the mortgage, but over time they tend to lose the housing because they have the debts."

Council planner Elizabeth Blades-Hamilton, 58, counts herself lucky that she earns a respectable wage now. When her marriage broke up 12 years ago, she had custody of three children and a low-paid administration job. With almost no savings after decades working part time, she lived off the $70,000 left over after selling her home while she got a tertiary degree. She rents in the northern suburbs, and started saving seriously only two years ago.

"So long as you're in a relationship, [a small pay cheque] is not so much of an issue. It's a second income," she said. "But when it's a sole income, it's not sufficient."

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Frequently Asked Questions about this Article…

What does research say about the risk of poverty and homelessness for middle‑class divorcees?

Research cited by the Salvation Army and led by Dr Andrea Sharam (Swinburne University) warns that middle‑class divorcees—particularly women—face a real risk of poverty and homelessness as they age. The study found that life events such as divorce can dramatically change housing and retirement outcomes, even for people who were previously employed and educated.

How common is renting among women over 40 who don’t expect to own a home before retirement?

In a survey of 111 Victorian women over 40 who did not expect to own their homes before retirement, 77% were still renting. Despite this, 79% had tertiary degrees, 76% were employed, and the median income was about $50,000—showing renting can be common even for relatively well‑educated, employed women.

Why do divorced women over 40 often have low superannuation and minimal savings?

The article highlights factors such as ‘mummy‑tracking’ (periods of part‑time work and maternity leave), divorce-related changes to household income, and debt. Two‑thirds of the women surveyed expected $100,000 or less in superannuation at retirement, and 53% were in debt. Even some earning over $70,000 still had minimal savings.

What is a community 'land lease' scheme and how could it help older women at risk of housing insecurity?

Dr Sharam called on councils and welfare organisations to invest in community 'land lease' schemes where crown or private land is lent to low‑income housing developments. The article notes many women could raise a deposit for about a $150,000 investment but cannot afford a house or flat on the open market, so land lease projects could increase affordable housing options.

How does divorce affect women’s ability to keep housing and manage mortgages over time?

According to the article, women often receive the house and mortgage after divorce but can lose the housing over time because of accumulated debts and single‑income pressures. Having younger children at the time of divorce can compound financial strain, making it harder to sustain homeownership.

What demographic trends should everyday investors know about older women, retirement and housing demand?

The article highlights that as baby boomers reach retirement, the number of financially vulnerable older women is expected to rise. Women are entering their 60s with roughly half the superannuation of men, and the number of women living alone was projected to grow (the article cited a projection of 1.8 million by 2013). These demographic shifts could increase demand for affordable housing and social services.

Is a higher current income enough to protect divorced women from retirement vulnerability?

The article suggests not necessarily. It states that 'it's not about low income, it's about your life course'—meaning that even women earning over $70,000 in some cases had minimal savings. Career interruptions, single‑income households after divorce, and debt levels can undermine retirement security despite higher incomes.

What personal steps from the article illustrate how divorced women can rebuild financial security?

The article profiles council planner Elizabeth Blades‑Hamilton, who after divorce sold her home, lived off the roughly $70,000 remaining, completed a tertiary degree and later started saving seriously. This example in the article underscores strategies used by some women: improving qualifications, re‑entering better paid work, and prioritising saving, even if those steps occur later in life.