Millennials face potential homelessness in retirement

According to the first government report into what will happen to UK millennials who have been unable to get on the housing ladder by the time they retire, at least 630,000 won’t be able to afford private rents using their pension income.

The report by the All-Party Parliamentary Group regarding Housing and Care for Older People has forecasted that those still renting when they retire may increase from 450,000 to as many as 1.5 million by 2046.

On average, private tenants pay 40% of their earnings in rent, but with people’s income typically halving when they cease working, retirees could be forced to spend up to 80% of their income on rent. It also noted that this will mean that at least 630,000 millennials will be unable to afford their rent and may be forced to move to lower cost accommodation, move into temporary accommodation at the state’s expense or face homelessness.

The document also predicts that the quality of rented accommodation that people may end up having to live in may be unfit and unsuitable for their needs if alterations are unable to be made when things such as handrails or stair lifts are needed.

Unfit homes are already known to be a direct cause of the death of many older people with at least 53,000 having passed away in winter during the last five years due to conditions related to living in a cold home.

“But unless at least 21,000 suitable homes are built a year, there will be nowhere affordable for them to live. The consequence is bound to be homelessness for some.” said Richard Best, the chair of the group.

The group ask in their report for a national strategy to be put in place to prevent pensioner homelessness and request that 38,000 new rental homes are built each year designed and specifically for pensioners.

If you’re concerned by the contents of this article and would like to speak with one of our advisers please click here to request a call back.

Written by Kay Crooke – Associate Practice Director at Prosser Knowles Associates Limited.