Pensioners renting in retirement need an extra £398,000 to cover costs

UK housing crisis Soaring rent and mortgage |

GBNEWS

Joe Sledge

By Joe Sledge


Published: 27/08/2025

- 10:24

Updated: 27/08/2025

- 14:53

Some 17 million people already aren't saving enough money for the retirement they expect

The squeeze on pensioners' finances looks set to tighten further as fresh data points to a staggering rise in future rent costs.

Renting in retirement has become a growing concern for millions of Britons, with new research revealing that pensioners who don't own their homes could face an extra £398,000 in housing costs over their retirement.


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This stark reality comes as Britain grapples with rising house prices, stagnant wages, and a retirement crisis on the horizon.

The latest findings from pensions firm Standard Life have revealed that 17 million people are already failing to save enough for their expected retirement lifestyle.

And with four million would-be homeowners believing they'll never get a foot on the property ladder, the situation is only worsening, with future retirees set to face higher costs and a potentially lower quality of life.

Pensioners still renting in their later years will need an eye-watering £398,000 more in their pension pots to cover rent over 20 years, roughly double the amount required by homeowners who've paid off their mortgages.

These projections are based on a forecast of rental prices over two decades using the Office for National Statistics (ONS) figures.

At the moment, renters can expect to pay an average of £13,300 annually for a rental property when they retire. But by year 20, this cost will rise to over £26,600 a year, according to Standard Life's estimates.

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Pension crisis looms as cost of renting in retirement hits £398,0000

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Savers who plan to retire in five or ten years, could see these figures be even worse as rental prices climb. In fact, someone retiring in 2024 would need £391,000 over their retirement - around £7,000 less than what's required this year.

Still, £391,000 is significant, especially for those who haven't been able to save adequately. The financial burden of renting in retirement could leave many struggling to make ends meet, say experts.

Single retirees, for example, need to bring in at least £13,400 a year to cover basic living expenses, according to the Pension and Lifetime Savings Association.

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Retirement crisis looms as Britons face 'raiding pension pots' to pay housing costs

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But this figure assumes that the individual owns their home outright. Add rent into the equation, and the annual sum required to maintain a decent standard of living doubles to £26,700.

The growing costs of renting in retirement are concerning, with renters only having a 43 per cent chance of meeting the minimum retirement income threshold, compared to 98 per cent for those who own their homes outright.

Claire Altman, Managing Director at Standard Life, part of Phoenix Group, commented: "While saving more for retirement is increasingly essential, regardless of whether someone plans to rent or own, the reality is that for many, homeownership may no longer be feasible.

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When planning for retirement, its crucial to consider how essential expenses like housing will be covered

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"For those who do expect to be renting in retirement, it will be important to start planning how they will meet these housing costs, especially if rent prices continue to increase, as seen in recent years.

"When planning for retirement, its crucial to consider how essential expenses like housing will be covered. If being mortgage-free is not an option, products like annuities, which offer a guaranteed income for life, may help ensure ongoing costs such as rent and essential bills are met."

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