Retired renters increasingly stepping off the property ladder

More than 40% of retired renters are former property owners and pay £423 a month in rent on average

Retired UK homeowners in the United Kingdom are turning their backs on owning their own home to join the 25 per cent of retirees who already rent, according to Prudential.

More than two in five of these retired renters are former homeowners who, for a range of reasons, have made the decision to sell.   

The Prudential study found that the decision to sell their property and move into rented accommodation was mainly driven by finances - around 40 per cent were forced to sell their homes to pay off debts, 19 per cent needed to release funds in order to cover the cost of a divorce or separation, and nearly one in ten sold in order to use the money to boost their retirement income.

According to the study, retired renters pay an average rent of £423 a month, roughly two-thirds more than the average mortgage repayment paid by retirees who still have home loans, of £257 a month.

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."

Almost one sixth of retired renters choose not to own their home as a lifestyle choice, says the report, while 35 per cent say they rent because they do not have enough money for a deposit to buy a property and 41 per cent cannot afford home ownership. The majority of retired renters (58 per cent) have never owned a home and nearly three quarters of them plan to continue renting for the foreseeable future.

Seven per cent used some money from the sale of their property to help their children get onto the property ladder, while nine per cent used the money to help support their children in other ways.