Editor's note: This brief was summarised by The Property AI Team from a report by PropertyWire. Read the original article for full details.
Pensioner Renters in UK Expected to Triple by 2044, Says ABI Report
The number of pensioner households renting in the UK is projected to more than triple by 2044, according to new research from the Association of British Insurers (ABI). The report highlights that almost two million additional people are expected to retire without owning their home over the next two decades.
The ABI’s report, ‘Pensions Adequacy: Housing, Households and Auto-Enrolment’, indicates that one in three pensioner households could be renting by 2044. The private rental sector is expected to see the most significant impact, with an increase of 1.3 million pensioner renters over this period.
The research, conducted by the Pensions Policy Institute for the ABI, found that renters face substantially higher costs in retirement compared to homeowners. According to the analysis, privately renting a two-bedroom property throughout retirement can cost between £200,000 and £400,000.
The report also notes that the average defined contribution pension pot is £154,000, dropping to £105,000 for women. This means that rental costs could consume a person’s entire private pension savings, leaving the state pension to cover all other living expenses.
The findings suggest that landlords and letting agents will need to adapt their tenant assessment criteria and property offerings to accommodate an ageing rental population. The shift raises questions about housing security and affordability for pensioners who may lack substantial pension savings or investment income.
The report comes at a time when housing market activity has shown signs of decline, and the buy-to-let market has experienced significant changes, with many landlords reassessing their portfolios.
Source: PropertyWire