An estimated 43 per cent of people think they will still be renting their home when they reach 70 years of age, Aegon has found.
In a survey, the insurer has also found that 14 per cent of people think they will still be paying their mortgage at age 70. It said that a combination of getting on the housing ladder later, higher house prices and the ability to borrow for longer, mean that more people expect to be repaying their mortgage into what would normally be considered retirement years.
With rents on the rise, Aegon has claimed that many people will need to assess whether or not their retirement income will be enough to cover rent and other living expenses once they finish work. It has warned that a sizeable portion of those withdrawing a pension will have to keep working to keep a roof over their heads.
According to the Department for Work and Pensions (DWP), in the ten years to April 2017, the percentage of households privately renting increased across all working age groups, while the proportion of homeowners with a mortgage fell among those of working age.
Aegon pensions director, Steve Cameron, said: “Our survey suggests that we will see an increase in the number of lifetime renters in the future. As younger generations increasingly fail to get onto the property ladder, renting a home becomes the long-term plan and for many the only realistic option.
“But the impact rent payments will have on retirement plans needs to be carefully considered. Renting while working is a very different situation to renting when retired. People need to consider how feasible it is to fund rent when they are no longer earning a salary. It would be dangerous to assume the state will continue to provide the same level of housing benefits to future retirees as they currently pay.”
He added that although one in four people expect to still be working at 70, not everyone would be fit enough or want to do so.
“That’s why it’s good to see the development of new solutions for older borrowers, such as Retirement Interest Only mortgages. As our population ages, we need to look creatively at how to join up employment, pension and housing policies.”