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14 April 2008

Renting costs pensioners £23bn a year

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by Gill Montia

Renting costs pensioners £23bn a year

The property ownership obsession that afflicts most Britons can be better understood in the light of recent research from Friends Provident.

The life assurer estimates that renting property costs UK pensioners £23 billion a year.

On an individual basis, those who live out their retirement in rented accommodation are on average £133,117 worse off than their home-owning peers.

The gap could widen considerably if rents continue to rise at their current pace, leaving many older tenants to face increasing levels of poverty.

According to Friends Provident, a pensioner living in rental property today needs to find £11,491 to cover rent, utilities, ground rent and service charges.

The bill for the average retired homeowner is considerably less, at £3,020, assuming there is no mortgage to pay.

Meanwhile, the Office for National Statistics has published its latest pension trends update, showing that 62% of pensioner couples had less than £10,000 in pension income in 2005/06.

In the case of single pensioners, 50% received less than £6,000 per annum.

The ONS described average pension incomes from the state and private schemes as “modest”.


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