Cost of renting in retirement rises to £398,000

Tuesday, 26 August 2025 10:58

Print|
Email

Standard Life flag

People who expect to rent during retirement could need an additional £398,000 in savings compared to those with no housing costs.

The figure has increased by £7,000 from £391,000 in 2024, according to Standard Life’s Retirement Voice.

The company’s research on property and pensions found that homeownership remains a key goal, with 40% of people planning to buy a property in the future.

However, rising house prices continues to post a challenge.

The latest ONS data shows that average UK house prices rose 6.4% over the past year, reaching £271,000 in March, and for many, owning a home may remain out of reach.

The data also revealed that more than one-in-ten (12%) adults expect to still be renting when they retire.

There are clear regional disparities, according to the firm’s analysis. The southern regions, particularly London and the South East, consistently command the highest rents.

In contrast, areas such as the North East, Wales and Northern Ireland offer less expensive rental options, highlighting a regional divide when it comes to housing costs.

Average annual rents across the UK over next 20 years
Region	Year 1	Year 5	Year 10	Year 20	Total savings required
Average	£13,300	£15,430	£18,500	£26,600	£398,000
London	£28,000	£32,200	£38,700	£55,700	£833,000
South East	£17,000	£19,700	£23,600	£34,000	£508,000
East	£15,200	£17,600	£21,100	£30,400	£454,000
South West	£14,500	£16,800	£20,200	£29,000	£434,000
Scotland	£12,500	£14,400	£17,300	£24,800	£372,000
West Midlands	£11,500	£13,200	£15,900	£22,800	£342,000
North West	£11,100	£12,900	£15,500	£22,200	£333,000
East Midlands	£10,900	£12,600	£15,000	£21,700	£324,000
Northern Ireland (NI)	£10,400	£12,000	£14,500	£20,800	£311,000
Yorkshire & The Humber	£10,200	£11,700	£14,000	£20,300	£303,000
Wales	£9,900	£11,400	£13,700	£19,700	£294,000
North East	£9,000	£10,400	£12,500	£18,000	£269,000

Source: Standard Life. Figures are based on average life expectancy in retirement of 20 years and projected 3.7% annual rent increase. 3.7% has been estimated using monthly rental data available from Private rent and house prices, UK: May 2025. Figures rounded. Actual costs will vary by individual circumstances and inflationary trends.

Claire Altman, managing director at Standard Life, part of Phoenix Group, said: “While saving more for retirement is increasingly essential, regardless of whether someone plans to rent or own, the reality is that for many, homeownership may no longer be feasible.

“For those who do expect to be renting in retirement, it will be important to start planning how they will meet these housing costs, especially if rent prices continue to increase, as seen in recent years.”

She said when planning for retirement, its crucial to consider how essential expenses like housing will be covered. “If being mortgage-free is not an option, products like annuities may help ensure ongoing costs such as rent and essential bills are met.”

• Standard Life’s analysis used ONS data to project rental costs over a 20-year retirement period, based on an average annual rent increase of 3.7% since 2015.

Promote your vacancy to thousands of professionals on Financial Planning Jobs

Our specialist jobs service Financial Planning Jobs can help you reach nearly 12,000 financial professionals. You can set up an Employer Profile and post your job the same day on Financial Planning Jobs (terms apply). Dozens of Financial Planning and Paraplanning firms have used our affordable service to recruit new talent.

Offer: Use code 'FPJSaver10' on checkout to save 10% on your listing. Click for details:

jobs.financialplanningtoday.co.uk/