By Sophie Smith

An increase in renting could see future pensioners struggle to achieve an adequate standard of living, as the number of pensioners renting looks set to double by 2046, the Pensions Policy Institute (PPI) has warned. The PPI published its research paper, To Buy or not to Buy: the Changing Landscape of Housing in Retirement, in conjunction with Scottish Widows, exploring the implications of the changing housing market on future retirement needs.

Based on current trends, the report predicted that the percentage of those in the private rental sector at retirement age could more than double to 12 per cent by 2046, due mainly to changes in patterns of home ownership, with fewer people buying homes.

The institute found that this rise in the number of older people renting in retirement could see a subsequent increase in housing benefit claims of as much as 16 per cent by 2034, representing a £6.6bn annual cost. It also stipulated that where pensioners are homeowners, it is likely that they will still be paying off their mortgages throughout retirement, as the number of life-long mortgages is growing.

Estimating a rise in rental costs of around 3 per cent per annum over the next few decades, the research predicted that rental costs are likely to rise faster than average pensioner income, with fewer future pensioners having access to a defined benefit (DB) income.

This is likely to see rental fees take up a greater proportion of pensioners’ income, making private rented accommodation less affordable in retirement over time.

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