SCOTTISH Widows (insurance company) recently issued a report forecasting that many of tomorrow’s pensioners will never get on the property ladder and in retirement will have insufficient income to pay the ever increasing rent of private landlords.
Their recommendation is that renters in their fifties should start saving around £6,000 per year to afford their rent in retirement. Given that many non homeowners have too low an income to obtain a mortgage or save a deposit this would seem to be a non-starter.
Many will retire with the state pension and a poor private pension, probably around £200 to £300 per week, it’s difficult to see how they will afford the average rent in England and Wales of £845 a month or £1,250 a month in London.
The reality is that the shortfall will be paid by the tax payer to landlords who are free to increase rents at will. Needless to say private landlords will enjoy a prosperous retirement, courtesy of the British tax payer.
One solution is to build more affordable houses, but 300,000 per year would be needed and many of these would be snapped up by private landlords. Rent control would seem sensible and it has been done before.
Unless measures are taken now this situation represents a ticking time bomb for many of tomorrow’s pensioners and tax payers.
V J Connor, Bishop Auckland
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