Generation Rent isn’t just for millennials, and a growing number of over-50s renters aren’t managing to save enough to foot the bill.

By 2023, there will be more than a million retirees living in privately rented accommodation, which is triple today’s figure, according to research by Scottish Widows.

And it seems that renters aged 50-plus are not saving enough money to cover the projected costs of continuing to rent after retirement, leaving a £43bn shortfall across the country.

As rents keep on rising, the report estimates that old-aged renters will be stumping up 42% of their retirement income – based on average incomes – on rent.

To cover the costs, those aged 50 and older who currently rent and plan to do so when they retire, will need to put an additional £6,300 a year into their pensions to cover these costs. The alternative would be to work for an extra 5.1 years on average to make up the shortfall, an option that will be hugely unpopular for most.

Dan Wilson Craw, director at Generation Rent, said: “The common perception is that retirees either own their home outright or have a council tenancy, so the government will be in for a nasty shock as more of us retire and continue to rent from a private landlord. Many renters relying on pensions will qualify for housing benefit which will put greater strain on the public finances.”

Moving for affordability

Across the UK, as many as 39% of people who were planning to rent after they’d retired admitted they would have to consider relocating in order to afford the costs. In London, this figure was 65% as rents continue to rise out of reach for many.

For retired renters staying in London, the proportion of their income that would have to be spent on rent is projected to rise from 66% now to a huge 80% by 2023.

The north of England and Wales would be the most affordable options, with 14% of 55-64-year-olds planning to rent in retirement saying they would consider a move to Wales in order to keep down the costs of renting.

Douglas Cochrane, head of housing development, Lloyds Banking Group, said: “The importance of saving through pensions or other investments to offset later in life rental costs cannot be underestimated. The white paper ‘Fixing Our Broken Housing Market’ published in February 2017 refers to meeting the needs of an ageing population through appropriate housing provision. This report recognises not only the financial need, but importantly the need to build the right type of property suitable for later in life living.”