Older people like First Home Saver Accounts

First Home Saver Accounts are aimed squarely at young people saving for their first home, but Tony Beck from ME Bank says he has been surprised by the number of older people making enquiries about first home saver accounts. “Typically it has been parents and grandparents making enquiries about first home saver accounts. We have been surprised at the number of grandparents asking about the accounts because they want a way to help their grandchildren that is socially responsible.” In other words, Nana and Pop like the accounts because they can give money to their grandkids and know exactly where it going – to buy a house.

The balance in a first home saver account can only be used to buy a house and the balance is capped at $75,000. If the saver doesn’t buy a house with the money, it can be transferred to a superannuation account, but it can’t be withdrawn for any other reason. Those rules have created a surprising new, unintended market for the FHSAs – older Australians who have never owned a house. These people can open a first home saver account as a tax effective savings account in addition to their superannuation.

When they turn 65 years old, their FHSA balance can be transferred into their superannuation account. Tony Beck said feedback from the ME Bank call centre indicated that quite a lot of older people were realising the advantages a first home saver account can offer them.

Source: Banking Day