Renting in retirement could cost £419,000 over 20 years – Standard Life
The analysis found average monthly rents could rise from £1,160 to around £2,350 by 2046.
Retirees who rent could face housing costs of around £419,000 over a 20-year retirement, according to analysis from Standard Life.
Based on Office for National Statistics (ONS) private rental data and assumed annual rent growth of 3.8%, the analysis found average monthly rents could rise from £1,160 to around £2,350 by 2046.
Pensions UK’s Retirement Living Standards estimated that a single person currently needs an annual income of £13,900 for a minimum retirement lifestyle, but this assumes housing costs are already covered.
Standard Life calculated that renting could add around £13,910 to the income required over the next 12 months, taking the amount needed by a single renter for a minimum standard of living to £27,810.
Costs varied substantially by region, with a retiree in London potentially spending £859,000 on rent over 20 years, compared with £531,000 in the South East and £480,000 in the East of England.
At the other end of the scale, projected 20-year costs stood at £291,000 in the North East, £313,000 in Wales and £321,000 in Yorkshire and the Humber.
Pete Cowell, head of annuities at Standard Life, said: “Housing costs don’t stop at retirement, and renters face a very different reality to that of homeowners.
“For a growing number of people, housing costs could be the single biggest expense they face in later life, adding many thousands of pounds a year to the income needed to maintain a minimum standard of living.
“While support is available for those on the lowest incomes, many retirees will still need to plan for how ongoing housing costs will be met over the long term.”
Cowell added: “As renting in later life becomes more common, planning how those costs will be met is likely to become one of the most important financial decisions people make.
“Whether through savings, guaranteed retirement income products or a combination of both, having a clear plan for meeting those costs can make a significant difference to long-term financial security.”
Standard Life also highlighted research suggesting housing costs could become an issue for a growing proportion of future retirees.
Retirement Voice 2025 found 82% of current retirees own their home outright, while separate research from the Association of British Insurers (ABI) suggested one in three pensioner households could be renting by 2044.
Catherine Foot, director of the Standard Life Centre for the Future of Retirement, said: “Renting in retirement is set to become far more common in the years ahead.
“That exposes a fundamental flaw in our current pension system, which is built on the assumption that housing costs fall in later life.
“With a quarter of 60 to 65-year-olds already living in poverty, a rise in renting risks pushing even more retirees into financial difficulty.
“As the Second Pensions Commission considers the long-term future of pensions, it must reflect the financial realities today’s and future retirees face.
“Its recommendations will shape the system for decades to come, it’s vital that it results in tangible measures that build people’s financial resilience and support better long-term outcomes.”
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