According to financial giant Prudential, 42% of private renters are retired and pay an average £423 a month rent.
They have sold up to increase their retirement savings and to give a financial hand to their families.
The study found that easing finances was the driving force behind the decision to sell a home and move into a buy to let for many:
- 40% needed to repay debts
- 19% of sales were to pay separation or divorce settlements
- 9% wanted the cash to boost retirement savings
- 15% rent as a lifestyle choice
- 35% can?t raise the cash for a deposit to buy a home
- 41% say they cannot afford to buy a home
Most retired buy to let renters (58%) have always rented and 73% plan to continue renting.
However, the research also revealed selling a home to rent doubled living costs for most pensioners.
The average homeowner paid £257 a month, while buy to let renters paid £423.
This rent of £5,076 a year represents a third of the average expected retirement income of £15,300, says the Prudential.
Stan Russell, a retirement expert at Prudential, said: “Renting in retirement can make financial sense and accessing property wealth to boost retirement income is a genuine solution for many. Our research shows that many retired renters are perfectly happy with this arrangement.
“However, retirees should be aware of the extra financial burden they could be taking on if they choose to sell up and rent. I would urge everyone in the run up to retirement to speak with a financial adviser to help them plan and save for the income they’ll need to cover their costs when they stop working.
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Article courtesy of LandlordZONE