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Long term Renting risks ruining our retirement resilience

Renting affects the resilience of all age groups. 

Only one fifth of Millennial/Gen Z households who rent are on track for a moderate retirement income, compared to 51 per cent of homeowners.

For Gen X households, only 15 per cent of households who rent are on track compared to 56 per cent of homeowners.


All data comes from the latest version of Hargreaves Lansdown’s Savings and Resilience Barometer.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown writes: It’s no secret that getting that all important first step on the housing ladder is getting harder, but long-term renting risks leaving our retirement resilience in ruins. 

The latest data from HL’s Savings and Resilience Barometer shows less than one in five renting households are on track for a moderate income in retirement – this compares to over half of homeowning households.

Spiralling house prices have made it much more difficult to buy your first home. People are either buying later or not at all, and those that do get that all important toehold on the ladder are often taking longer mortgage terms so they can keep their costs low. 

This is having an enormous impact on people’s ability to prepare for retirement as many more people approach and enter retirement still paying housing costs. This not only impacts their ability to save, they also need to save much more to account for the fact they have to pay these costs into retirement.

You can see the enormous impact this is having on people. 

Only one-fifth of millennial/Gen Z households who rent are on track for a moderate retirement income though it’s to be hoped that over time more of these households will become homeowners and are able to free up income to help them get on track. 

Younger people can make use of products such as the Lifetime ISA to help them build up a decent deposit. If you contribute up to £4,000 per year you will benefit from a 25% government bonus that can really help you build up your savings. 

However, LISAs are only available to people aged between 18-40 so older savers can’t make use of them.

The picture gets decidedly grimmer the older you get. 

Only 15 per cent of Gen X and Baby Boomer households who rent are on track for a moderate income and with the clock ticking down to their retirement many risk having to make some tough decisions around needing to work longer or reducing their retirement expectations to make ends meet.

* Helen Morrissey is head of retirement analysis at business consultancy Hargreaves Lansdown *

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  • icon

    The LHA bill is going t be unaffordable when the renters retire!


    Why? They're only entitled to LHA for a one bedroom property. Maybe a DHP if they apply for one and if it is granted.
    UC for a single person without dependant children is incredibly low. Most will have the State Pension plus at least a small workplace pension, which will all erode their entitlement to means tested benefits.

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    Well if you spend your whole life renting and haven’t sorted yourself out before retirement what do you expect.
    Still dependent on the State to keep you from the cradle to the grave and me a 45% tax payer never ever had a penny from the State and my miserable pension taxed out of existence, give me a break.

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    I think it would be helpful if household budgeting taught in schools.


    But by who? most teachers I've come across haven't a clue in those subjects


    My son taught himself about financing. He has always been a keen saver (especially by living at home for as long as possible) and studied how best to invest his savings.

    After dabbling in peer to peer lending, being a landlord and other projects, for him he found the best solution is to put most of his savings into stock and shares isa. Tax free and no hassles. Also as his wages are just bringing him into the higher tax bracket he is putting more money into his private pension to bring him back down into the basic rate tax bracket.

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    There will be a tidal wave of all the people currently under 40 who don't want to work since the pandemic, but it's a good few years off yet. They may get along on benefits for now, but where are they going to live in the long term when the PRS has died?


    If they don't want to work now and take the free ride they will regret that in old age, self inflicted their problem

  • icon

    This is the subject which will devastate the young people of today, whatever the rights and wrongs of housing now, if they don’t eventually buy and own outright their primary residence…… 😬🆘🫣😱 it will be like Dickensian times for their older age. I have sold one of my mortgage free BTL’s and split the remainder ( after CGT) with my 2 children, with this added to their own deposit, one completed last Friday on a lovely 3 bed semi, their LTV is just below 50%, this will set them up for life. But what of those children without forward thinking parents like us ? The multiple’s needed now are immense without some kind of parental assistance. Renting in retirement will be a disaster 💰💵

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    Renting works for some people and isn't necessarily a pathway to a sad, miserable retirement.
    Some will need the mobility renting allows to pursue career opportunities. In many cases they will invest in other assets and have a very comfortable retirement pot.
    I hate to think how much I have spent over the years on estate agents fees, SDLT and solicitors bills every time I've moved house. It would certainly have been a major boost to my pension pot if it had all gone in there.

    The argument that mortgage payments are cheaper than rent is only part of the story. The actual mortgage interest may be lower but the interest that isn't being received on the slice of deposit or equity is conveniently ignored, as are the insurance and maintenance costs. Even the increase in value is illusionary until you either significantly downsize or die.

    Then there are people who have never earned enough to clear mortgage lending criteria. It's all a bit of an irrelevant argument for them. They either live in an expensive part of the country or work in a low wage industry (often as a key worker). Renting is just a fact of life and shouldn't be regarded as an inferior option. It's the only option in those circumstances. The people I know in that situation don't tend to live lavish lifestyles and seem to be far more knowledgeable about their pensions than I am about mine.

    Millions of Gen X and Millennials are likely to inherit at about the time they hit retirement, so that will change any projections HL choose to make.


    In retirement it’s doubtful they will need the mobility that renting gives, what they WILL be doing is paying high and higher rents with a reduced income, where as a home owner with no mortgage that money will be used for living and enjoying life . 🏊‍♂️🚢🏝.



    A chunk of retirement income will be used to maintain and insure the house. A mortgage is nowhere even close to the whole cost of homeownership. How many pensioners get ripped off by rogue builders and other scam artists?
    For some homeownership will be the overall cheaper option but not necessarily by as much as people would like to think. For others owning a house will be an absolute millstone.

    Some will want greater mobility in retirement, especially if they want to easily move closer to family or friends.

    There isn't a one size fits all answer.


    And hasn't the cost of insurance increased Jo

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    Private pensions are great for the people run them with charges going up every year.
    I put my money in property ,win win even after CGT.


    Me too Peter, spives in suits selling pensions a rip off so I bought property like you as well and no regrets there

  • icon

    Jo Westlake, l agree with you. As well, Hargreaves Landsdown are going woke. There are 9 million people not in education or training, NEET. Essentially the government is loading up PRS landlords with social costs.


    Hargreaves Landsdown are a big NO

  • icon

    I have an annuity with Aegon - they took over the original provider. Aegon will not release funds and HL want to charge me £1000 to act as a financial adviser confirming their proposal is better than the annual payment proposed by Aegon. Of course for that £1000 they will not guarantee their advice.

    I think, given I can survive happily on my current incomes, that I will go down for annual drawdown instead and sod HL.

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    Jo. I understand about being ripped off by builders or very often what seems to be a rip off. Their costs have risen in recent times in many cases by half as much again. The cost of sometimes doing even small repairs can be expensive especially with Tenants under your feet and stuck in traffic getting there and getting supplies especially in Towns with rampant stupid unnecessary temporary traffic systems allegedly Health & Safety for road works and no workers to be seen, this is all new nonsense we were able to do it before. Anyway at the end of the day the Builders have to run their Vans rear their families and have a weeks wages to survive or he won’t be there. The way it is now we are just thankful for some one to come and do it, ( if in London you’ll have £12.50 ULEZ inside M25 + Congestion Charge £15.00 in some areas so £27.50 per day to leave the
    house or buy a Complaint Van but don’t know how to afford that on bits & pieces of maintenance, Charge I Suppose).


    Agreed Michael I'm not a builder but carry out my own repairs and come up with many of those same issues, cost of basic materials have sky rocked, tine spent chasing around after materials, diesel in car etc all costs money, which we then have to pass on to tenants in increased rent, inflation hits everyone

  • Catherine Fiona Henshaw-Brett

    How interesting. How can anyone plan. What about the dreams and expectations everyone must have. Overpopulation war hunger and a small earth. What future our children and grandchildren?


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