State pension a ticking time bomb as 1.6million renters face bills crisis

A third of older homeowners say they have no private or workplace post-retirement funding to fall back on but at least can make life more financially comfortable by downsizing or renting out a room. Tenants face a lack of security of tenure with landlords able to issue a notice to quit or raise the rent making it more difficult to budget. The research by retirement specialist Just Group finds older renters are almost twice as likely to say they are not financially confident compared to homeowners (24 percent v 13 percent). 

Half of all those nearing retirement say they feel unprepared but there is a marked difference between those who rent and those who own a home.

Seventy percent of UK renters feel unprepared compared to 37 percent of homeowners.

Stephen Lowe, of Just Group, said: “We’re used to thinking about property as the largest asset many people own and as a way to provide income in retirement – whether through downsizing, equity release or renting out rooms. 

“But we think much less about the other half of the picture – those who rent. 

“There’s the obvious issue that people who rent won’t have the financial asset of property to fall back on in retirement. But what we have discovered is something more fundamental about people’s saving for retirement. 

“To put it bluntly, no house and no pension – because if you’ve been able to buy a house, you’re also more likely to have retirement savings.” 

He urged tenants to start saving even the smallest amount of money for their old age. 

Stephen added: “For this group of people aged 50-65 who don’t own a house, they may feel retirement is coming close and with no pension and no property they have limited options – but that’s not necessarily the case. 

“Someone who’s 50 today will receive the state pension at age 67 – giving them 17 years to save for retirement if they continue to work. 

“That saving could prove invaluable and provide what they need for the odd luxury or cover some of those unexpected bills. 

“The same is true for those who do own a property but have no private pension. 

“They will have the value tied up in their home which they can use to supplement their income in retirement, of course, but they also have the opportunity to build up a retirement pot.” 

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