Renting when retired

[Blackbirdsinthgarden]

I DO know some people have no choice whether or not to rent in retirement but would be interested to hear other peoples views. I was out at a social occasion a few nights ago with my friends, their grandmother, three adult young men, mid 30’s, their partners and 4 children. During the meal two of the young men (brothers) got into a heated discussion with their cousin (a young man of a similar age, with his partner - no children). The cousin and his partner were renting a property but were saving very hard for a deposit to buy a property. His cousins (both on decent salaries) both rent and guffawed the cousin and his partner for wanting to buy their own property. They laughed and said it “was a fools game”. Both had no intention of buying their own property and told said cousin they could rent a better house in a better location rather than buy. The cousin’s view was that, if he and his partner bought in a less desirable area, they may eventually move up the housing ladder and eventually own their own home and be mortgage free in retirement.

My own young adult children made sacrifices to buy and now have a mortgage on a property which they like, but not their dream home, so I was on the side of the cousin. The two brothers earn more than the cousin and have been offered help by their parents and grandmother for a deposit, but have refused, saying that, when they retire, the State/Government will pay for their rent through housing benefit. They told the parents/grandmother that they would still welcome the money though to go on holiday! (Which was refused, by the way!).

I was taken aback and before the discussion got too heated, the topic was soon changed and we enjoyed the rest of the evening, albeit with a bit of tension in the air.

Am I being unreasonable to think that the two brothers should have welcomed money towards a deposit and that they were being naive/arrogant to think that the State will fund their housing in retirement? They both, as reasonable earners, rent quite comfortably and prioritise expensive holidays/cars over everything else. Will the Government still be able to fund their housing in retirement? Apart from the State Pension, they said they have little private pension (a mug’s game apparently!) and that they would be entitled to pension credit.

Apologies for the rant but I feel they are quite blinkered! Who knows what benefits will be available in 30+ years time (if any). I know that some people will have no choice to rent in retirement, but at their age I would have bitten my family’s hand off!!!

It depends, some people would rather have a fab life now and an austere one in council accommodation as an old person whilst others scrimp and save through the best years of health for a more secure old age. There’s no right or wrong answer but I think things will look very different in 30 years (I’m thinking grim large scale 1 room HMO’s for financially insecure old people) and it’s not a chance I would want to take.

Sorry, I should add for clarity that the young men won’t inherit much. The grandmother lives in a housing association flat (with about 15K savings). Mother married again and had two further children and lives abroad and was home for a holiday. Her semi-detached property in the UK is rented, which pays the mortgage, so the only inheritance will be split by four. Original father not on the scene.

Yes SandysMam - I agree. It’s just that the brothers seemed arrogant and irresponsible, assuming that the Government will provide for them in old age.

Well if they have a small pension, then they will get that and their state pension, and maybe the government will pay the rent, but they'll find quickly they won't have a good or even decent lifestyle. It will be shit.

Well the State will not pay the whole rental for a house of their choice now let alone in future!

Have they not heard of the "bedroom tax"?
And if they are reliant on the State where are these landlords in the private sector who are prepared to rent to them over a working person?

They sound niaeve

Pension credit will not cover the rent for a naice 3 bed semi with gardens/garage etc. They will be forced to downsize to a 1 bed flat (at best).

Yes - true. It’s none of my business, but the fact that they guffawed and laughed at their cousin for trying to get on the property ladder got to me a bit.

Hmmmm, this has a Kirstie-type tone to it!

Or if they needed a care home, they would have no choice to self fund as they would have no property to sell.

They are daft to be laughing at you, lucky to be offered deposit money and very shortsighted.

People make different choices I can see nothing sides ,used to have a mortgage ,the home I had needed a lot of repairs and was hard to sell ,I currently live in a housing association house ,it's not in the best area ,but I don't have to pay for repairs and it's secure .

The state would pay if they didn't have the funds to pay .

The benefits won't pay for all of it, just £350. That was a reason why my relative ended up moving into council accommodation, instead. As she couldn't make up the annually rising private rent, before she moved, it had gone up to £600 (started off as £500).

But before the Tories came into power in 2010, there was no cap on housing benefit at all. A family could rent a house for £1,000 a week and it would have been covered.

So if Labour get in again then they could well be correct. They could both live in mansions and we could all pay for it when they are retired.

I wanted to buy my own home for the exact same reason as the cousin (well, that and I wanted my own property where I could have pets and not be under threat of eviction) but in the end, who knows what is around the corner or how many years of life each of us have left. Maybe I'll get to retire, maybe I won't. Maybe I'll get to 80, maybe I won't. There's no knowing and with the possibility of global conflict an increasingly likely reality (not just Russia, but climate change is going to create millions and millions of climate refugees in the coming decades) I would not worry about their attitude.

They sound a bit thick. If they can’t work out compound interest works on property and pension while they are young and living high on the hog, then they will have plenty of old age lean days to remember them. They’ll be lucky to afford second hand shoes on a state pension, never mind heating and eating.

I think it depends on how they are renting the property ..... if its via the council or housing association then yes they'll most likely get everything paid for them, however if they are private renting then they stand no chance at affording to rent anywhere nice on a state pension.

Question is how available will social housing be in 30 years time!!

Owning your own home gives a stability and security that renting never will.

They are very niave to think otherwise.

Well they’ll have a shit retirement, and will then discover the wisdom of the rest of the family.

It’s absolutely fine to rent when retired, but you should be aware that most pension calculators assume that you will be mortgage free and have no housing costs. If you plan on renting then you need to plan to have a pension to cover your ongoing housing expenses

The State would subsidise a cheap care home. Nearly all their income would go towards it.
"free" care, aside from rare NHS funding, is a myth

He who laughs last... laughs loudest...
They will find out in time....

DH is the only one of his siblings to own his home (2 bed flat in London) and that is because I pushed for it, his two other adult sisters live in Israel and rent, another sister lives at home. No one in his immediate family thinks home ownership is that important; his mother does own her house but only because her ex husband believed in home ownership so she kinda fell into it (plus got given money for a deposit). I sometimes feel like the only crazy wacko who thought that saving for a deposit was important! His mum thinks I am a bit nuts for wanting to buy a bigger flat now before having a kid because 'I don't need it, I don't have any kids yet'. But they don't allocate properties based on need, the bank uses affordability criteria and they tend to be more strict when you have dependents!

I used to work in dementia care as a nurse on an NHS ward many people did move to nursing homes, who didn't have self funding ,I'm not sure there is such a thing as a " cheap care home "

Yes - I agree they will find out in time and that they are being naive. For the poster who said that “there was a Kirsty feel” about the post (or something similar) I would like to point out my elderly mum rented (had no option) and then went into sheltered housing, where she received housing, benefit and pension credit to top up her pension of £147 a week (old system). The support is there who need it, thank goodness, Now that my mum is now in a care home, she’s entitled to keep a part of her savings (quite deleted now) and her State pension (apart from £30) a week, goes towards her care costs. I pay £62 top-up fee per week to keep her in the care home of my choice (she has dementia). This isn’t a great care home, but is better than some in the area.

My point in my original post was that the brothers were naive, laughing at someone who wanted to better themselves, and their “live for today” attitude was a bit irresponsible. By the way, they both bragged about the exotic holidays they had been on, while their cousin went in a caravan in North Wales. Both had a good time, by the way!

Some care homes are better than others - at least in my area. At least my mum’s is clean, nicely placed and the care staff actually care.