Surge in pensioners renting expected as homeownership declines
8:01 AM, 13th July 2026, 3 weeks ago
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One in three pensioners could be renting by 2044 as falling homeownership leaves more retirees facing housing costs in later life, according to a new report.
Research from the Association of British Insurers (ABI) and the Pensions Policy Institute (PPI) warns the number of pensioners renting is set to more than triple over the next two decades, rising by 1.3 million people.
The PPI is urging policymakers to rethink pension policy as growing numbers of retirees face the prospect of paying rent alongside relying on pension income.
Significant challenge for retirement
According to the data, only 65% of households aged 45–65 are owner-occupiers today, around 15 percentage points fewer than 20 years ago.
The data also reveals renters face much higher costs in retirement than those who own their home outright.
According to the data, renting a two-bedroom home privately costs £200,000 – £400,000 throughout a person’s retirement. In comparison, the average person’s DC pension pot is £154,000, falling to £105,000 for women.
The PPI and ABI warn that rising rental costs could consume a person’s entire private pension savings, leaving the state pension to cover all other living expenses.
Dr Priya Khambhaita, head of research at the Pensions Policy Institute (PPI), said: “The PPI projects over one in three pensioner households will be renting by 2044, posing a significant challenge for retirement adequacy.
“With a greater share of retirees’ individual private pension wealth being eroded by ongoing housing costs throughout later life, this fast-accelerating pension adequacy challenge is already being felt by some of today’s pensioners, and no single policy lever will be enough to address it in isolation.
“To improve retirement outcomes, the central question is not only how much saving should increase, but who most needs support, and how pension policy must interact with housing, social care, and the wider welfare system.”
Introduce reforms
The two organisations are calling on the government to introduce reforms to better support renters in retirement.
They say means-tested benefits should better reflect modern household structures and shared financial circumstances, with eligibility criteria that more flexibly account for household size and composition.
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Member Since June 2019 - Comments: 905
9:02 PM, 13th July 2026, About 3 weeks ago
With the demise of final salary pensions it is highly unlikely that ordinary workers will be able to afford typical rents – a time bomb that every political party is trying to avoid.
Member Since May 2018 - Comments: 2278
12:02 PM, 14th July 2026, About 3 weeks ago
Pensioners do have other options:
https://www.thisismoney.co.uk/money/mortgageshome/article-15675471/I-help-Britons-want-retire-Portugal-questions-asked-most.html
According to the article in the link above you can claim your state pension in Portugal [you can have your personal pension paid in Portugal] the cost of living in Portugal is lower, and In Portugal your spouse, children, grandchildren, parents and grandparents all pay zero tax on inheritances and gifts including property and investments, with a 10 per cent stamp duty (imposto do selo) applying to non-direct heirs. There’s a big difference between 0-10% and 40% isn’t there?
Especially under an un-elected Andy Burnham the Labour government needs to be careful not to make it more viable for pensioners to spend their money or gift it to their heirs in the sun…unlike Denis Healey’s 1970s Britain, these days it’s not just the Rolling Stones or Sean Connery who can move to sunnier climes to escape the voracious appetite of the tax monster.
But under the Labour Renters Rights Act, provided I had all details of the pensioners’ income and savings enabling me to make a claim for unpaid rent against the estate in the event of death, I would rather rent to a pensioner than to a tenant with children, or a tenant on benefits. Although under an extreme-left-wing-nutcase government I might want to rent to a UK pensioner, but take my rent in Portugal, a country that apparently still seems to think I’m attractive despite my advancing years. If I did it then in comparison to the UK financial regime my kids would probably end up better off.