Renters need to save £391,000 more for retirement than homeowners

Renters need to save £391,000 more than homeowners to afford a basic lifestyle in retirement, according to the Pension and Lifetime Savings Association. Couples with no housing costs require an estimated £22,400 a year of post-tax income to secure a "minimum" retirement lifestyle. To provide that income over a 20-year retirement, a couple with no housing costs would need savings or a pension pot of £448,000. However, renting couples will need almost twice as much, £839,000, to afford the same lifestyle. The figures are based on the average monthly rent of £1,246, assuming a 2.5% annual rent increase. The number of people aged 45-64 expected to still be renting by 2041 is estimated at 3.6m. Caroline Abrahams from Age UK warns that many private rented tenants aged 45 to 64 have no savings and may be unable to afford their home in retirement. 

The Sunday Times (30/06/2024)