Renting in Retirement

kevinpert

I am concerned with the fact that my Wife and I are renting as we approach retirement. We do have savings but only around 55k. Living in the South East is not advisable in retirement as the cost of renting is around £900 PCM. If we were to buy and would only be able to get a mortgage for around 10 years and this would mean using the bulk of my savings. I worry about the future especially as my wife can't work but has built up enough NI contributions so will get a full pension. Renting will mean paying at least £700 PCM for life, buying will mean having little savings but owning our house in 10 years.

AlanP_2

What's your employment and pension situation?

Can you borrow enough on a mortgage to buy in the south east?

Do you need to live in South East now or when retired.?

Nebulous2

There are almost always options out there.

Do you need to stay in the South East? If you aren't bound by it then you could move somewhere cheaper.

Do you have a decent pension? How old are you? Nationwide offered me a mortgage up to my 75th birthday. Pushing it beyond 10 years might make it more affordable, but then you need to think how you are going to fund it in retirement.


Edit: overlapped with the previous poster

Linton

There are lifetime interest-only mortages available that could cover perhaps half the cost of the house, with the mortgage company being repaid from the sale of the house after the second death. It could well be significantly cheaper than your estimated rental costs.


You should discuss the options with a specialist mortgage broker.

xylophone

Have you and your wife obtained new state pension statements?

https://www.gov.uk/check-state-pension

Do you have other pension provision?

Does she?

Merlin139

Do you have any other pensions than the state one you will get in the future?

My parents are in rented accommodation and live next to another couple around the same age. Both my parents and the couple next door each get a state pension in their own names. My father has an Army pension that now pays around 9K a year. The couple next door have no other pensions.

Now my father has to pay all of his rent and council tax and the couple next door get all their rent and council tax paid for them.

So if you do have other pension income you would be paying your rent as well.

If you have the ability to buy your house in 10 years then I would suggest you do.

eastcorkram

@Merlin139
Are you saying that someone who is renting privately, gets to live rent free once they reach pension age, provided all they have is state pension?

Silvertabby

eastcorkram wrote: »

@Merlin139
Are you saying that someone who is renting privately, gets to live rent free once they reach pension age, provided all they have is state pension?

It depends. Pension credit and housing benefit are both (household) means tested, so if the couple mentioned get under £X then they could indeed qualify.

However, the long term aim of the new single tier pension is that the full amount is set at just over the means test limit for pension credit. A couple who each receive the full £164 per week will have a total household income of just over £17K per year (tax free) - so no pension credit and very likely no housing benefit either.

Something for todays youngsters to consider when deciding to opt out of paying into additional pension schemes 'because they can always claim off the State when they are old'.

kidmugsy

Silvertabby wrote: »

Something for todays youngsters to consider when deciding to opt out of paying into additional pension schemes 'because they can always claim off the State when they are old'.

Ah, but when they are old someone will want to buy their votes and will accordingly offer them just such a subsidy in the name of "social justice". You can almost write the Guardian opinion pieces now. (They will be written by people - or robots - who own several houses themselves of course.)