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AIBU?

To think that fairly soon it will be impossible to retire unless you're a homeowner?

174 replies

Echobelly · 05/09/2022 10:00

... at least in some parts of the country.

I'm sort of amazed this isn't being talked about - we have more and more people who can never afford to buy, whose rent payments take a significant chunk of their salary, and that chunk only goes up and up. How are they supposed to save for a pension when all their money goes on rent? And there's very little social housing to go round.

Homeowners at least will mostly be able to pay off mortgages, that are likely to be less than rent and allow them to pay into pensions, and have the option of downsizing to help manage retirement.

In the next few decades it seems likely we will see increasing numbers of people who reach retirement age, or may simply no longer be well enough to work, yet their pensions will not cover rent, let alone anything else. But no one's thinking about how society is supposed to cope with this and won't until it's too late it appears.

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dudsville · 05/09/2022 10:02

I wonder that too.

Sluj · 05/09/2022 10:08

YANBU but this has always been the major advantage of buying rather than renting.
The disadvantages are obviously having to get the deposit together, pay large monthly amounts of mortgage depending on where you live, living in fear of interest rates rising and having to do expensive repairs. Swings and roundabouts.

RoseAndRose · 05/09/2022 10:10

I agree with you up to a point

If the 'triple lock' goes, then it's going to be even more dreadful

XjustagirlX · 05/09/2022 10:16

i think we will have a lot of elderly people needing to stay in employment but who physically and mentally cannot do the job anymore. This might be because they have dementia or can’t follow the latest technology or just can’t work for 8 hours a day.

they will want to stay working to pay their rent but employers will want to get rid of them.

I expect a lot of age discrimination cases within the workplaces. And future Aibu threads complaining about older workers.

OneRingToRuleThemAll · 05/09/2022 10:18

There are a lot of elderly homeowners who can't afford basic maintenance and are living in awful conditions.

It's why probate sales are houses that need ripping out and refurbished.

Echobelly · 05/09/2022 10:18

Yes, it's going to create problems with people who need to work, but sadly can no longer really do their jobs because of physical or memory issues.

OP posts:
SquirrelSoShiny · 05/09/2022 10:19

Your OP is the Tory dream.

Frazzled2207 · 05/09/2022 10:22

Seems inevitable.

we have paid into pensions but expect the return to be very modest. We do expect to have paid our mortgage off by the age of 50 which is an extremely fortunate situation to be in. We also expect to be working until at least 70.

XjustagirlX · 05/09/2022 10:23

Also these elderly people can’t move to a care home as we don’t have enough spaces and they couldn’t afford it anyway.

They may be forced to live with family if they are willing.

Will they be given a council house? I wonder if they will rank higher or lower than a young family with children who are homeless?

TheYearOfSmallThings · 05/09/2022 10:26

In my experience it is the other way around - older relatives who never owned a house and retired on the state pension have always been housed by the state, whereas those who bought and retired on a state pension struggled to maintain increasingly dilapidated houses.

bellac11 · 05/09/2022 10:28

Yes its the main reason I was so keen to buy, I was saving from when I was 15 to when I bought my first property, I had a good deposit and bought in my early 20s.

Unusual for my age to be concerned about rent and house buying but I knew that I didnt want to be paying rent for all my life. I was in bed sits from when I was 17 and couldnt afford the rent of a flat so just saved and saved.

We will be mortgage free next year and its a massive relief.

If you can afford to buy then you should buy.

It might be different if this country had really invested in social housing, with capped rents and stability for renters but theres been no political or public will for that. Now people are moaning but who have they been voting for all these years?

KimberleyClark · 05/09/2022 10:29

How do other countries where renting rather than buying is the norm manage?

XjustagirlX · 05/09/2022 10:29

@TheYearOfSmallThings i think the ones who live in a house provided by the state may be ok. But the problem comes with the 30-45 year olds who will never own a house and pay rent to private landlords.

BarbaraofSeville · 05/09/2022 10:31

KimberleyClark · 05/09/2022 10:29

How do other countries where renting rather than buying is the norm manage?

They save a lot more than most Brits do towards retirement.

But here, don't people of pensionable age get housing benefit if they're on a low income? So they don't need to pay all their rent themselves anyway.

Arranstorm · 05/09/2022 10:32

IMO It has always been like that.

My parents told me at 16 that my only way to any form of financial security in old age was to buy a house a.s.a.p.

I saved every penny possible, went without clothing, holidays, a social life etc and did three jobs, working seven days a week, to get a deposit together. In those days when lending was through a Building Society I also waited six months before they had capacity to lend.

Even when the keys were in my hand I had to endure a lodger for a year and even do his washing for him, just to be able to buy furniture, white goods etc. I also had to cope with 16% interest rates later in the mortgage term.

In many respects permanent renting would have been much easier (I rented my first home while saving for my deposit) but thanks to my DM & DDad I never took my eye of the need to buy.

I really feel for younger people, coping with higher house prices and difficulty getting on the market now, but the belief that it was much easier in the 70’s, 80’s etc is not entirely true.

SlipperyLizard · 05/09/2022 10:32

At the moment, people who retire on a low income (eg just state pension) receive housing benefit, which if they’re lucky will just about cover the rent of a small property. If they’re very lucky, they’ll be in social housing so might be able to stay there (unless the bedroom tax has forced them out first). They likely will be exempt from council tax.

Currently, I expect this is a minority of pensioners. If the government doesn’t do something to make housing more affordable, and pension saving more attractive, then the housing benefit bill in the future will be through the roof (and there likely won’t be enough houses at the right price to rent).

Like with social care, though, no politician wants to talk about how high house prices will bite society on the bum in the future, because too many people (who vote) “feel” rich as their house is worth more. Screw the young, they’ve got equity growing.

I live in a house that I could not now afford to pay market value for, and I have no idea what my children will do.

Christonabike37 · 05/09/2022 10:33

I'm definitely expecting to have to house my mother.

LindaEllen · 05/09/2022 10:40

I agree. I have a friend who rents a home from another friend at 'mates rates' but that friend has always been open and honest that the house is his retirement fund and that he will sell as soon as he retires. So the friend who rents will have to move and pay full rent, when he has nothing more than state pension, quite a lot of debts, and no savings whatsoever.

I have no idea what he's going to do.

Echobelly · 05/09/2022 10:46

@KimberleyClark - I think in countries where renting is the norm, there's much more 'corporate owned' rental, which probably keeps prices more balanced and not just hopping up every year for the sake of it. People can also live in them loong term, so less money spent on moving, deposits etc.

I think it was unwise to let a situation develop in the UK whereby so many rental homes are in private ownership - not because 'landlords are bastards' but because so few really know that they are doing, put prices up 'because that's what you do, isn't it?' (you shouldn't be doing that unless you have recently conducted major improvements on the home!) and because it by necessity means those homes aren't stable. If a LL has a change of circumstances, they will sell up. A corporate landlord won't do that.

OP posts:
BarbaraofSeville · 05/09/2022 10:51

LindaEllen · 05/09/2022 10:40

I agree. I have a friend who rents a home from another friend at 'mates rates' but that friend has always been open and honest that the house is his retirement fund and that he will sell as soon as he retires. So the friend who rents will have to move and pay full rent, when he has nothing more than state pension, quite a lot of debts, and no savings whatsoever.

I have no idea what he's going to do.

But unless the friend has special circumstances that you haven't mentioned, why does he have 'lots of debt and no savings' if he's renting a room at mates rates?

Even if he earns NMW, he should be able to afford to save out of his income if his only outgoing is a cheap room in a shared house.

hewouldwouldnthe · 05/09/2022 10:54

We paid of our mortgage early with an inheritance. If not I'm sure we would be on the breadline now

MoodyMooToo · 05/09/2022 11:07

Rent will be covered by Housing Benefit so don’t worry too much about your retirement

TheYearOfSmallThings · 05/09/2022 11:14

@TheYearOfSmallThings i think the ones who live in a house provided by the state may be ok. But the problem comes with the 30-45 year olds who will never own a house and pay rent to private landlords.

If older people can't pay private rental, they are prioritised for Over 55 social housing and in my experience they always get housed. The units are small and would be a comedown for anyone who had spent their working life renting a smart spacious house, but for an older person who needs a roof over their head they are fine.

SherwoodForest · 05/09/2022 11:15

I don't think this is a retirement problem. It is a single person problem.

If you live in London or most of the south east, rents are too high for a single person to rent a flat, if they are on average or lower salary. Single people need to flat share or live as a lodger. This is no longer just when young and newly left home, it's happening to people in their 40s and 50s.
Will people want to flat share or rent a room to a pensioner? That's what many pensioners will need.

Echobelly · 05/09/2022 11:21

Yes, definitely a problem for rising numbers of single people @SherwoodForest

I wonder if specialised co-living developments for low-income single older people might become a thing?

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