Persistent housing costs are a major concern for UK retirees, warns Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown, amid data released by the Department for Levelling Up, Communities and Housing from the English Housing Survey.
The report shows that 7% of homeowners aged 65-74 and 2.3% of those over 75 were still repaying a mortgage in 2021/22, albeit lower than the 2011/12 figures.
Notably, the mean weekly mortgage payment for over-65s is £209, second only to the 35-44 age group.
“The dream of entering retirement mortgage-free remains intact for many but for those who got on the property market late, or not at all, housing costs remain a huge burden,” Morrissey said.
On top of this, the data disclosed that over a quarter (25.5%) of all social renters were retired, along with 6.8% of all private renters. For Morrissey, this group of retirees is of particular concern. “For those who rent the obligation is never ending and a significant proportion of all social renters and almost 7% of private renters are retired,” she explained.
Morrissey emphasised the importance of factoring housing costs into retirement plans and warned of their potential impact on personal finances. “Housing costs can have a significant effect on how much we can save for our retirement and once in retirement they can take up an enormous chunk of our income.”
Highlighting the disparity between standard retirement income models and reality, she added: “The PLSA’s retirement income standards are modelled on the basis that the mortgage has been repaid. The reality is that if you are paying housing costs in retirement the amount you need to allow for is much much higher.”
Morrissey ended with a stark warning about the consequences of the ongoing cost-of-living crisis, particularly in the light of surging mortgage rates and rents. “In the current times these issues are particularly acute as mortgage rates and rents continue to surge amid a cost-of-living crisis that has already squeezed every last bit of room from our budgets.”
