Rents are expected to more than double over the next 20 years, taking the total cost of renting in retirement to around £419,000, according to research by Standard Life.
Retirees who rent their home could need an additional £13,910 to cover housing costs in 2027, doubling income needed for a minimum standard of living in retirement.
One in three pensioner households could be renting in retirement by 2044, according to research by the Association of British Insurers.
According to the Pensions UK Retirement Living Standards, for a minimum lifestyle in retirement a single person needs an income of £13,900 a year, rising to £32,700 for a moderate lifestyle. However, these figures assume housing costs are already covered.
For those who rent in retirement, housing costs could add the equivalent of around £13,910 over the next twelve months, increasing the income needed to achieve a minimum living standard from £13,900 to £27,810.
London was projected to be far above the average, at £859,000 in cost, compared to the lowest by region, the North East, at £291,000.
Pete Cowell, head of annuities at Standard Life, says: “Housing costs don’t stop at retirement, and renters face a very different reality to that of homeowners. For a growing number of people, housing costs could be the single biggest expense they face in later life, adding many thousands of pounds a year to the income needed to maintain a minimum standard of living.
“While support is available for those on the lowest incomes, many retirees will still need to plan for how ongoing housing costs will be met over the long term.”
However, Retirement Voice 2025 found that 82 per cent of current retirees own their home outright, significantly reducing their living costs.