Plundering super to pay the mortgage

DESPERATE Australians are draining their super nest eggs to fend off mortgage foreclosures in record numbers.

Plundering super to pay the mortgage

DESPERATE Australians are draining their super nest eggs to fend off mortgage foreclosures in record numbers.

As continuing interest rate rises squeeze cash-strapped mortgagees, more are dipping into their super to save their homes.

Super fund trustees are reporting a staggering rise in the number of people drawing on their compulsory retirement funds as rates soar.

Some funds have reported a 30 per cent increase in people successfully getting access to super to stop mortgage foreclosure in the past year.

Thousands more are using super to cover rising medical costs and funeral expenses - allowed by super regulator Australian Prudential Regulation Authority (APRA) on "compassionate grounds''.

Others on benefits are claiming $10,000 a year on the grounds of financial hardship.

Super funds confirmed the number of people grabbing money to pay for medical costs was also up more than 80 per cent in the past five years.

By law Australians cannot access their super until they are 55 and retired if they were born before 1960 and not until 60 and retired if they were born after 1964 - unless they have good reason.

Consumer Action Law Centre chief executive Carolyn Bond said the rise was alarming.

"We are concerned that mortgage stress is just going to get worse,'' she said.