Housing is one of the greatest expenses we face in life. Traditionally, many people worked towards owning their homes outright by retirement, achieving a significant reduction in expenses just as earnings stopped. For decades, this milestone has provided financial stability in later life, easing the pressure on pension income.
However, the landscape is changing. Increasingly, older individuals are reaching retirement with ongoing housing costs—whether through interest-only mortgages where the capital remains unpaid or through renting in the private sector. This shift presents a new challenge: when income from work stops, housing expenses may still account for a significant portion of retirement income.
The Growing Trend of Renting in Later Life
Recent data highlights a striking trend. Between 2014 and 2024, the number of households headed by individuals aged 55 to 64 renting privately grew by 66%, while those aged over 65 renting privately rose by 33%. Over 900,000 households in England with a lead tenant aged 55 or over are now renting privately—a figure that continues to climb.
These changing demographics bring with them broader implications. Older renters often need security of tenure, flexibility to personalise their homes, and accommodations for pets or other lifestyle needs. For those relying on fixed or limited retirement incomes, high housing costs can lead to financial insecurity—or worse, pensioner poverty.
The Role of Financial Planning
This growing challenge makes financial planning more crucial than ever. While traditional retirement planning often focuses on building a pension pot, a holistic approach considers the interplay of income, assets, and expenses—including housing costs.
For those approaching retirement with unresolved housing expenses, incorporating Human Capital Strategies into a financial plan can be a game-changer. These strategies focus on extending earning potential beyond traditional retirement age, helping to bridge the gap and sustain housing costs.
How We Can Help
At the Academy of Life Planning, we understand that housing costs in retirement are more than just numbers—they are about security, stability, and peace of mind. That’s why we take a holistic, person-centred approach to financial planning.
We empower individuals to:
- Assess their current housing situation and project future costs.
- Explore creative solutions to extend or supplement income in retirement.
- Build a financial plan that aligns with their personal goals and values, ensuring they feel prepared and confident.
Whether it’s through our self-directed Planning My Life programme or expert guidance from our Financial Life Coaches, we provide the tools, support, and clarity needed to navigate these complex issues.
Take the Next Step
If you’re concerned about managing housing costs in later life or want to explore strategies to secure your financial future, we’re here to help. Let’s work together to create a plan that gives you the freedom and confidence to enjoy retirement on your terms.
Discover more about our services and how we can help by visiting Academy of Life Planning or booking a free discovery session today.
Your retirement shouldn’t be overshadowed by financial worries. With the right plan in place, you can look forward to a future where housing is secure, and life is enriched with opportunities.
Q&A: Addressing Housing Costs in Retirement
Q: Why is housing such a big concern for retirees today?
A: Housing costs are one of the largest expenses we face. Traditionally, many retirees owned their homes outright, significantly reducing costs in later life. But things are changing—more people are reaching retirement still paying off mortgages or renting. This means housing can take up a larger share of pension income, creating financial pressure when earnings stop. Planning ahead can make all the difference.
Q: I still have a mortgage and retirement is approaching. What should I do?
A: First, don’t panic—you’re not alone. Start by reviewing your mortgage terms and understanding your repayment options. Then, consider creating a financial plan that includes strategies to extend or supplement your income in retirement. With the right guidance, it’s possible to manage these costs while maintaining your financial security.
Q: I’m renting and worried about covering housing costs in retirement. What options do I have?
A: Renting in retirement is becoming increasingly common. The key is to factor ongoing rent into your financial planning. This could include increasing your pension contributions, exploring ways to boost your income, or even looking at housing options that better fit your budget and lifestyle. A holistic financial plan can help you navigate these decisions with confidence.
Q: How can I extend my income into retirement if I’m still paying housing costs?
A: One option is to consider Human Capital Strategies, which involve leveraging your skills and experience to generate income beyond traditional retirement age. This could mean part-time work, consultancy, or even starting a small business. With the right plan, you can create a steady income stream that supports your needs and goals.
Q: I’m worried about running out of money in retirement. How can I feel more secure?
A: Feeling secure starts with a plan. A holistic financial plan takes into account your income, expenses (including housing), and assets. It also considers how to make the most of your resources, from pensions to potential income opportunities. The good news is, it’s never too late to start planning.
Q: What makes the Academy of Life Planning different from other financial planners?
A: At the Academy of Life Planning, we focus on more than just numbers. We take a holistic, person-centred approach that looks at your entire life—your goals, values, and priorities. Whether you choose our self-directed Planning My Life programme or work with one of our expert Financial Life Coaches, you’ll receive support tailored to your unique situation. We believe financial planning should empower you to create a life that’s balanced and fulfilling.
Q: I’m new to financial planning. How do I start?
A: Starting is simple. Begin by understanding your current financial situation—your income, expenses, and future goals. Then, think about what’s most important to you. If you’re unsure where to go from there, we’re here to help. Booking a discovery session with us is a great first step to explore your options and get personalised guidance.
Q: Can financial planning really help me if I’m close to retirement?
A: Absolutely! While it’s ideal to plan early, it’s never too late to take action. Even small changes can make a big difference. We’ll help you explore practical strategies to make the most of your resources and feel more secure about your future.
Q: How do I know if the Academy of Life Planning is right for me?
A: If you’re looking for transparent, supportive, and holistic financial guidance, we’d love to work with you. Whether you prefer to take the lead with our self-directed tools or want expert assistance, we’ll tailor our approach to suit your needs.
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