Information on housing in retirement has been missing from the adequacy debate generated by Pension UK’s annual report on the subject. Standard Life has produced a good report showing how much housing impacts the affordability of lifestyle’s as we stop earning.
This has been picked up by the Daily Mail’s “This is Money” session and amplified here by Rachel Mason.
Well done Lucy Evans for amplifying Standard Life’s report on the cost of housing to wrinklies.
It is not the same for all of us. The numbers point to just how different it is to live in retirement house in London and the East midlands/ 
But we think of our retirement bills (such as renting) as coming out of income not capital. It is odd to think of rental as a capital sum!
If a Londoner, do you really need nearly to be a millionaire to rent! Of course the calculation is taking into account increases in rental due to inflation but it is calculations of what we’ll pay as income relative to the income that’ coming in , that most people need.
It is part of the craziness of retirement saving that we are now considering the average cost of rental in retirement as £419,000 not an inflation linked weekly/monthly or annual slice of money coming in.
What is coming in for all of us is state pension and for some of us a works pension paid as income (if we are lucky)
But to suppose lifetime bills such as rental as a capital sum is scary and I’m not sure what we will be doing going forward.
Savers who don’t own their home could be hurtling towards a pensions crisis as the bill for renting in retirement reaches almost £420,000, This is Money can reveal.
This is of course an advertisement for increasing your saving into your retirement pot but we learn that the majority in Standard Life’s survey, and I bet This is Money reader’s , will be property owners in retirement.
The majority of current retirees – some 82 per cent – are homeowners, according to a Standard Life survey, but this number is only expected to dwindle in the coming years as property price tags climb even further out of reach.
It’s not just the cost of renting that is awkward, it’s the cost of owning, especially if you own leasehold. Standard are right to bring this up and these journalists to follow up, but we need to move away from thinking about our retirement in terms of these huge sums of money. We need to think about the granular costs of ownership or renting and how they bite into our retirement income.
Let’s redo the numbers as the income we need to find to pay the bills so that Daily Mail readers (whether property owners or renters) can understand whether they will be in crisis or not.