English Housing Survey: Housing costs a major burden for retirees

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, comments on the publication of the English Housing Survey data for owner-occupiers, recent first-time buyers and second homes and social and private renters, showing housing costs are a major burden for retirees.

Key points from publication:

• • 80% of over 75s and 77% of those aged 65-74 were owner occupiers in 2021/22.
  • 7% of owner occupiers aged 65-74 were still repaying a mortgage along with 2.3% of those aged over 75.
  • This has decreased from 2011/12 when 10.5% of 65-74s were still repaying a mortgage and 4.7% of over 75s were.
  • Mean mortgage payment for the over 65s is £209 per week. Only the 35-44 age group pay more (£210 per week).
  • Over a quarter (25.5%) of all social renters were retired along with 6.8% of all private renters.

Helen Morrissey says:

“The dream of entering retirement mortgage free remains intact for many but for those who got on the property market late, or not at all, housing costs remain a huge burden.

“The vast majority of over-65s are owner occupiers but within that there are still significant numbers of households who face having to find a significant chunk of change every month to repay their mortgage.

“At least mortgage holders can envision a time when the loan will be repaid, and they can free up the extra cash for other things.

“However, for those who rent the obligation is never ending and a significant proportion (25.5%) of all social renters and almost 7% of private renters are retired. 

“Housing costs can have a significant effect on how much we can save for our retirement and once in retirement they can take up an enormous chunk of our income.

“However, they often aren’t factored into our retirement plans – for instance, the PLSA’s retirement income standards are modelled on the basis that the mortgage has been repaid.

“The reality is that if you are paying housing costs in retirement the amount you need to allow for is much, much higher.

“In the current times these issues are particularly acute as mortgage rates and rents continue to surge amid a cost-of-living crisis that has already squeezed every last bit of room from our budgets.

“Recent government data indicated people who retired during the pandemic were considering a return to the workforce – we could see a growing number of them deciding to put their retirement dreams on ice in a bid to make ends meet.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay