A national think tank is calling for a significant overhaul of retirement policy as an increasing number of people live in poverty amid decreasing housing affordability.

The Committee for Economic Development of Australia has released a report suggesting young people be allowed to dip into their superannuation funds to help buy a home to combat the growing problem.

An ageing population and the impact on retirement policy has been part of national debate for many years but the impact of sustained housing affordability issues is only just beginning to be recognised as a significant issue, the report argues.

CEDA chief executive Stephen Martin says retirees are more likely to live in poverty if they don’t own a home and, in an environment where home ownership rates are steadily dropping, there will be a future cost if that is not addressed.

“Access for younger people getting into the housing market now has to be addressed by looking at the way they can perhaps access their superannuation entitlements now as a deposit on a first home,” Professor Martin told ABC radio on Tuesday.

CEDA research released in April found that between one and 1.5 million Australians live in poverty and the elderly, particularly those who do not own their home, are an “at-risk” group.

The overall poverty rate of older people in Australia is three times the OECD average and one of the highest.

“Without a significant policy overhaul, that number is likely to significantly rise over the next 40 years,” Martin says.

Taxation arrangements must be reviewed because concessions are benefiting the rich and are being used as tax mitigation measures rather than encouraging retirement savings.

The report also calls on the family home being part of the assets test for the age pension, changing super payments to an after income tax payment and scrapping all other superannuation tax concessions.

– AAP