For most people, the idea that they will still be renting in retirement seems implausible or too far away to think about. However, due to rising house prices, especially in the south east & greater London area, it's becoming increasingly likely that an ever-greater proportion of current renters will never make the transition to home owner status.
According to the BBC, the UK will lose its current status as a nation of home owners should current trends continue. The share of UK tenants renting from a private landlord will double to nine million over the next 15 Years. Already, retirees in London are spending 66% of their income on rent and this may balloon to 80% by 2032 (Brian Milligan, Personal Finance reporter, BBC News, November 2017).
Pension provider Scottish Widows estimates that the average renter planning to retire in 15 years' time is under saving by a massive £525 per month!
However, the projections mentioned may be negated by the fact that the government has recently announced that £15 Billion of additional financial support for new house construction will be provided over the next 5 years. A brief of the government's report can be viewed here: Building the Homes the Country Needs
Whatever the final outcome regarding the successful implementation of the government's announced program, leaving your financial future to chance is not something most people would consciously pursue. Intelligent planning and small sacrifices in the short term could lead to a rosier future for those of us that would rather not have their future decided by fate.
Time is of the essence when deciding to take control of your financial future. Starting early can make a massive difference between being independent and able to support the lifestyle you dream of in the future or on the other hand, having to survive the circumstances that are imposed upon you.
Which would you prefer? If you feel the need to take control of your financial future, contact us here at Westminster Wealth Management, we can help.
The value of investments and income from them may go down as well as up and you may not get back the original amount invested.
Information is based on our current understanding of taxation legislation and regulations which is subject to change.
Renting in retirement: How feasible is it?