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 more 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 did the Salvation Army research find about baby-boomer divorcees and homelessness risk?

The Salvation Army–backed research by Dr Andrea Sharam found middle‑class divorcees, especially women over 40, face a growing risk of poverty and homelessness as they age. The study highlights that divorce can sharply change housing prospects and long‑term financial security, with many unable to re‑enter home ownership.

How does divorce affect women over 40's ability to get back into the housing market?

According to the study, women over 40 who return to renting often never get back into the housing market. Career interruptions (the so‑called “mummy tracking”), part‑time work and maternity leave reduce superannuation and savings, and debts after divorce can lead to losing previously owned homes over time.

What were the key survey findings about the financial situation of women over 40?

Dr Sharam surveyed 111 Victorian women over 40 who didn’t expect to own homes before retirement. Findings: 77% were still renting, 79% had tertiary degrees, 76% were employed, median income was $50,000, two‑thirds expected $100,000 or less in superannuation at retirement, and 53% were in debt.

How much superannuation did the surveyed women expect to have at retirement?

The survey found that two‑thirds of the women expected to have $100,000 or less in superannuation at retirement, illustrating a significant retirement savings shortfall for many older divorced women.

What is a community land lease scheme and how could it help financially vulnerable older women?

Dr Sharam recommended councils and welfare organisations invest in community "land lease" schemes, where Crown or private land is lent to low‑income housing developments. The idea is to lower housing costs: many women in the study could raise a deposit for a $150,000 investment but could not afford a house or flat in the regular market.

Were the women in the study carrying debt or lacking savings?

Yes. More than half (53%) of the surveyed women were in debt, and even among those earning over $70,000 the study reported minimal savings, underscoring the vulnerability of older women despite reasonable incomes.

What long‑term demographic trends are increasing the number of financially vulnerable older women?

The article notes several trends: baby boomers approaching retirement, women reaching their 60s with about half the superannuation balance of men, more women living alone (projected to reach 1.8 million by 2013 in the study), and women marrying and starting families later — all factors that raise financial vulnerability after divorce.

What should everyday investors know about the housing and retirement implications raised by this research?

For everyday investors, the research signals growing demand for affordable and supported housing options and increased pressure on social and community housing solutions as baby‑boomer divorcees age. It also highlights broader retirement savings gaps for women, suggesting policymakers and community investors may need to explore solutions like community land lease schemes to address housing affordability for vulnerable older women.