To inform our submission to the Victorian Government’s review of the Retirement Villages Act 1986, CPRC co-funded the University of Melbourne to research what kind of information is available to older Victorians when choosing a retirement village; and to determine how easily, or not, this information is able to be compared across different information sources and different village types.
The research involved an online survey and three face-to-face community events for those without internet access. 950 people responded to the survey, with an average age of 77. The majority of respondents (51%) reported having a long-term lease.
Key findings include:
- People rely heavily on industry information sources and social connections when choosing a retirement village – top information sources include village information days or tours, current residents, internet searches, family, friends
- There are few experienced lawyers in this area, consistent with the findings of the Parliamentary Inquiry – legal advice is not accessible or particularly useful, leaving retirees at a big disadvantage
- Most people said they understood the contract well but then reported quite low levels of understanding of important cost features, like exit costs (i.e. deferred management fees), the costs of refurbishing a unit when you leave, and the time taken to receive exit payments (i.e. the money people pay in at the start, less deferred management fees etc)
- 36% of people were dissatisfied with exit costs and the refurbishment costs, people reported feeling ‘trapped’ by exit costs and unable to move
- 30% of people were dissatisfied with the overall costs (upfront, ongoing, exit) and 32% didn’t have a view either way – suggesting a lack of consumer information and understanding of contract features with major financial ramifications
CPRC has a number of recommendations for how to improve the system for consumers.
We worked very closely with Residents of Retirement Villages Victoria (RRVV) and Housing for the Aged Action Group (HAAG) on this work and would like to extend our thanks to these groups, and the broader Steering Committee.