Renting is becoming increasingly popular in the UK, with property prices rising and wages not rising, as well as changes in attitudes towards renting rather than owning a home.
Despite many people still seeing renting as something that only younger people do, more and more older people are deciding to rent during part or all of their retirements.
It’s a huge life decision and one that’ll depend largely on individual circumstances, both financial and personal. However, there are lots of pros and cons that apply to everyone making this choice, and here they are.
The pros of renting in retirement
You’ll be mortgage-free
There’s still rent to factor in, of course, but you can simply end your tenancy and find another one rather than go through the hassle of selling. This gives retired people much more flexibility, as they can move closer to family and grandchildren, or move to an area they always wanted to live in, without house price worries.
You could be releasing a lot of equity
If you’ve paid off your mortgage and your property has risen in value, you could be sitting on (or in) a goldmine. Releasing the equity you’ve built up over the years could boost your pension pot and allow you to live your best life in your golden years.
No maintenance worries
As any homeowner will attest to, keeping your property in good condition can be a headache. Whether it’s a leaky roof, worn flooring or a dodgy boiler, the buck stops with you. Renting, on the other hand, means your landlord or letting agency takes care of everything for you.
Your tenancy could include some fancy perks
If you decide to move to a rental complex, you could have a gym or swimming pool included, as well as a communal rooftop terrace and a concierge. Landlords and agencies are taking advantage of the boom in renting and are competing for the attentions of potential tenants.
You may decide to rent in a warden-assisted facility
If you need some extra help as you get older (as many people do), then a warden-assisted complex may be ideal for you. You’ll have your independence and privacy, but also the assurance of knowing that help is just moments away should you need it. Your friends and relatives will also feel reassured, especially if you live some distance from them.
The cons of renting in retirement
You’ll be paying rent
This is the most obvious – and possibly the biggest – downside of renting. Rents have gone up in recent years and you don’t have the opportunity to change the rates as you do with a mortgage.
You don’t own the property
The flexibility of not owning your home also comes with a certain amount of insecurity. Depending on the type of home you opt for, you could face having to move when the tenancy ends and this is something you may not want to deal with in your later years.
Your landlord might not accept pets
Although more landlords are willing to take on tenants with pets nowadays, it’s not a given and so this could restrict your choice of home or force you into a heartbreaking decision.
Your rent could be seen as money down the drain
Your rent is essentially a service charge and doesn’t build up any equity for you. As an older person, this might not matter much, but you should still think about how many years of retirement you have and whether your money should be working for you rather than your landlord.
A big decision
There’s no right or wrong answer here and your decision will depend on your individual circumstances and plans for your retirement. Looking at these pros and cons, however, should help you to ask yourself the right questions as you make this decision.
