Research shows one in eight retired people will live in rented accommodation in 15 years

While the inability of youngsters to get their foot on the property ladder and buy their first home is well documented and reported, significantly less attention is given to a growing segment of the population who are too old to secure a mortgage and find themselves with little choice but to eternally rent property.

This was the finding of new research, which shows that one in eight people who are retired in Britain will be living in rented accommodation in 15 years’ time. This is three times as many as today’s figure.

The research, compiled by Scottish Widows, also found that 42% of the average retirement income will be spent on rental costs. This means that in order to cover the costs, those who rent property and plan to retire in 15 years’ time will need to put an extra £525 into their pension pot each month. Alternatively, they would need to work for an additional 5.1 years to be able to financially afford the growing cost of renting in retirement.

The research revealed that as well older people coming to the end of their working lives living in rented accommodation, younger renters believe it is unlikely they will find themselves in the position where they could buy their own home.

According to the study more than a quarter of tenants under the age of 45 don’t think they would realistically be able to become a homeowner. 26% of the 25 to 34-year-olds surveyed said they anticipate they will still be paying off their mortgage well into their retirement.

Robert Cochran, retirement expert at Scottish Widows, said what was once a term used to describe younger generations, ‘Generation Rent’ is now being used in relation to older generations.

“The number of people renting in retirement is set to treble over the next fifteen years, but alarmingly few people are thinking about how they would cover the growing cost of a property lease when they stop working,” said Cochran.

“Whilst some people may choose to rent later in life, we also need to ensure it’s a more sustainable, secure option for an ageing population, many of whom will have no choice. We’re therefore urging the Government to consider ways to refine the housing market to better suit older renters such as open-ended tenancy, with predictable rents and protection,” added Cochran.

With more and more people facing a lifetime of renting, it is important tenancies are made more secure so that tenants have greater feelings of security in their lives.