Retired renters pay the price for selling up

Retirees turning their back on the housing market in the pursuit of ready cash to settle debts are paying the price in accommodation costs, the latest figures suggest.

The number of older people living in owned or mortgaged property has dropped from 74.3 per cent of retirees in the 2011 census to 73 per cent in 2013, according to the Office for National Statistics (ONS).

One in every four retirees now rents the roof over their head, just under half of whom are former homeowners, research from Prudential has found.

A small proportion (9 per cent) of those sold up in order to release funds for their retirement, but a huge 42 per cent felt forced to sell in order to settle debts, while almost 20 per cent had to quickly release cash to cover the cost of separation or divorce.

"The fact that some retirees say they are being forced to sell up purely because of the need to pay off debts is concerning and suggests they are not receiving professional advice," says Stan Russell, a retirement specialist for Prudential.

"Organisations such as the Money Advice Service and Citizens Advice offer free advice and can help enormously in these situations."

Although more than half of retired renters have never owned their own home, they pay an average rent of £423 a month – two-thirds more than the £257 average repayment paid by those who still have mortgages. For someone retiring in 2013 and paying the average rent, accommodation will account for nearly a third of the average expected pension of £15,3002.