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!!!

@entropynow, email your Tory MP and ask him to throw in affordable housing into the leadership debates. Look upwards, not downwards when feeling resentful.

While I agree this person probably has a false idea of what their retirement will look like, there appears to be a moral value applied to home ownership.

There's nothing wrong with choosing to rent rather than making lots of sacrifices to buy a home you don't like in an area you don't like. Our obsession with buying property is what's driven property prices far out of reach for anyone on a below average salary.

I’m in a HA property and because of the size of the property and location (close to central London) it would cost close to 1mill to buy. I’ve seen other properties on my street on right move. There is no world in which I could afford to buy it. On my salary I’d need to move far out of London and massively downsize. I’m also lucky to have a secure tenancy. So for me personally it would make no sense to buy. I should get full HB in retirement and even if I didn’t, I can let out one room for nearly as much as the full rent cost (this is allowed, you just can’t let the entire property). As others have pointed out, I’ll have no repair costs to worry about. Being so central means I don’t need to run a car. My costs will be minimal.

Private renting is a whole different ball game. I’ve seen a relative have to move into ever smaller properties as rents have risen. They’re on minimum wage as they live rurally and not many job opportunities. They are entitled to some UC but the housing allowance is way below market rent. They also have the expense of running a car as it’s needed to get to work (dire public transport). No security at all. They are just surviving.

If they could get secure tenancy with the council or a housing association, then I guess they’re right. Also it doesn’t sound like they’re going to have any children whose lives they’d like to better so why not?

The best of owning a home is the security element, to me.

It’s naive to think the system now will be the same in the future. Legislation and policies change all the time.

There is no milk and honey from any political party.

When I was a fresh faced 21 year old I thought I would get my state pension at 60, there were no tuition fees and child benefit was universal. All changed under successive Governments, the Labour Party introduced tuition fees, people always seem to forget that. There have been many other changes that affect society as a whole or just specific groups but all have a knock on effect.

When you rent you have no control whatsoever with how long you can remain in that property for.

@Babyroobs A perfect example of pensioners being asset rich cash poor was played out by my Mother and her sister. Both widows who lived till past 90. Mother sold her 4 bed house and bought a 1 bed bungalow with a small garden. Aunt remained in her 6 bed three storey house with enormous garden the size of two building plots. My Mother lived comfortably with no worries having freed up capital and with small running costs. My Aunt lived in a state of purgatory, freezing house, livedon the ground floor only towards the end, burnt herself boiling kettles as she would not put the hit water on but was deemed compus mentis so could do as she wished.

The main difference was personality, my Mother was always the practical type, Aunt was always a deeply sentimental soul. She raised her children in that home, her DH died in it and she couldn’t stand to leave.

No the government will take the private pension as income and add it onto state pension so unlikely they will get any help. If the only had state pension they would get pension credit so would be no worse off than person with additional private pension

Surely that depends on the size of the private pension? Pension credit is not very much at all is it?

Maximum income from the state including pension credit is £182.60 a week.

If they could have bought and are choosing not to I think they’re being very naive. Owning in later life provides a degree of security. by the sounds of it they won’t be paying much into a pension so not sure how they think they’ll fund their retirement. By then the state is unlikely to be paying to house then at the level they’ve been used to.

Also I would rather sell my home in old age to pay for decent care of my/my families choosing than be at the mercy of whatever the council choose to put me in. I’ve seen the difference with grandparents between a nice home and a more basic one.

I got on the property ladder in my 20s. Bought and sold a couple of times over the years. Not far of 60 and now mortgage free. Not assisted with any inheritance or hand outs. Going forward might consider selling and renting (rather than a formal equity release scheme) to free up equity.