A Scottish Widows analysis published this week gave a stark warning. In 10 to 20 years’ time it’s not pension incomes that are the worry but the fact that so many of tomorrow’s pensioners who never got on to the property ladder in the 2000s and 2010s will have to find huge amounts of money to pay ever-escalating rents to private landlords. Scottish Widows suggesting that non-homeowners currently in their 50s should start saving an extra £6,000 a year now to be able to afford their rent in retirement. As if people on low incomes are going to find that sort of money. The reason they are renting is that they were never able to find the savings for a deposit on a house in the first place, or didn’t earn enough to qualify for a mortgage. Scottish Widows projects that one in eight retirees will be renting by 2032 – treble today’s figure.
The problem is that these people are likely to retire with little more than the state pension plus a small bit of private pension. Maybe they will be picking up about £200 a week once they are 67. Given that the average rent in England and Wales is £845 a month – and in London it’s about £1,250 a month – then the whole lot will be spent paying the landlord. So the State will have no alternative but to step in and pay most of the rent for payments going on for maybe 20 or 30 years. All so that the buy-to-let landlord with multiple properties can enjoy a lavish retirement themselves. Renting all the way through retirement, funded by the taxpayer, to a landlord who has the power to evict without reason and at short notice, is the worst possible situation.
Dan Wilson Craw of campaign group Generation Rent says: “The common perception is that retirees either own their home outright or have a council tenancy, so the government will be in for a nasty shock as more of us retire and continue to rent from a private landlord. Many renters relying on pensions will qualify for housing benefit which will put greater strain on the public finances.”
Scottish Widows says there is a £43bn gap between the income and savings people have now and what the rent bill will be in retirement. That’s more than one-third of the entire NHS budget for a year – to be squandered on rent.
Aviva, the UK’s biggest pensions company, also published figures on the colossal financial issues facing non-homeowners currently in their 50s. While those who have bought their homes feel pinched - and expect to use the equity in their home to pay for a better retirement - the outlook for non-homeowners is so grim that 20% believe their only hope is having a lottery win. Most non-homeowning workers aged above 50 say they have no money left after basic costs to put aside extra money for a pension.
https://www.theguardian.com/money/blog/2017/dec/02/pensions-timebomb-rents-homeowners
The problem is that these people are likely to retire with little more than the state pension plus a small bit of private pension. Maybe they will be picking up about £200 a week once they are 67. Given that the average rent in England and Wales is £845 a month – and in London it’s about £1,250 a month – then the whole lot will be spent paying the landlord. So the State will have no alternative but to step in and pay most of the rent for payments going on for maybe 20 or 30 years. All so that the buy-to-let landlord with multiple properties can enjoy a lavish retirement themselves. Renting all the way through retirement, funded by the taxpayer, to a landlord who has the power to evict without reason and at short notice, is the worst possible situation.
Dan Wilson Craw of campaign group Generation Rent says: “The common perception is that retirees either own their home outright or have a council tenancy, so the government will be in for a nasty shock as more of us retire and continue to rent from a private landlord. Many renters relying on pensions will qualify for housing benefit which will put greater strain on the public finances.”
Scottish Widows says there is a £43bn gap between the income and savings people have now and what the rent bill will be in retirement. That’s more than one-third of the entire NHS budget for a year – to be squandered on rent.
Aviva, the UK’s biggest pensions company, also published figures on the colossal financial issues facing non-homeowners currently in their 50s. While those who have bought their homes feel pinched - and expect to use the equity in their home to pay for a better retirement - the outlook for non-homeowners is so grim that 20% believe their only hope is having a lottery win. Most non-homeowning workers aged above 50 say they have no money left after basic costs to put aside extra money for a pension.
https://www.theguardian.com/money/blog/2017/dec/02/pensions-timebomb-rents-homeowners
No comments:
Post a Comment