More than one in three pensioner households could be renting by 2044. Is your retirement plan ready?

For decades, the UK pension system has benefited from a simple pattern. Many people reached retirement after paying off their mortgage, so their pension income mainly had to cover everyday living costs rather than a large monthly housing payment.

That pattern is changing. Research commissioned by the Association of British Insurers and carried out by the Pensions Policy Institute projects that the proportion of pensioner households renting could rise from 21% in 2024 to 36% by 2044. Private renting is projected to rise from 6% to 18%, while social renting could rise from 15% to 18%. In total, almost two million more pensioner households could be renting.

The figure is a projection, not a guaranteed outcome or a government target. The PPI used current housing patterns among people approaching retirement to model how pensioner tenure could change over the next twenty years. But it is a serious warning: retirement planning can no longer treat outright homeownership as the default.

Source: ABI, One in three pensioners to be renting by 2044 and PPI, Pensions Adequacy: Housing, Households and Auto-Enrolment.

The UK Retirement Living Standards are widely used to illustrate what different retirement lifestyles might cost. Their current figures put annual spending for one person at £13,900 for a minimum lifestyle, £32,700 for a moderate lifestyle and £45,400 for a comfortable lifestyle.

But the standards state that these figures assume you own your home outright. Rent and mortgage payments need to be added separately.

The PPI uses a median regional private rent of about £850 a month for a two-bedroom property in one of its illustrations. That is £10,200 a year before service charges, moving costs or unexpected increases. Add that mechanically to the current one-person minimum standard and the spending requirement rises from £13,900 to roughly £24,100. Add it to the moderate standard and it rises from £32,700 to around £42,900.

Those are not universal retirement targets. Rent differs sharply by location and property, and the Retirement Living Standards are spending estimates rather than gross income figures. The calculation simply exposes the size of the assumption. A retirement that looks adequate for an outright homeowner can look completely different for a renter.

Source: Retirement Living Standards.

The PPI estimates that privately renting a two-bedroom property throughout retirement could require between £200,000 and £400,000, depending on location and household circumstances. Its regional examples range from an estimated £173,500 for a single renter at the lower end to more than £350,000 for a couple in a higher-cost area.

That sits against median private pension wealth of around £154,000 for people aged 60 to 64 across the population, falling to around £105,000 for women. The comparison is not exact. State Pension income, investment returns and means-tested support can all contribute, and rent is paid over time rather than as one lump sum. Even so, the scale of the mismatch is hard to ignore.

It also shows why telling renters simply to save more is inadequate. The PPI's modelling suggests that the extra contribution rates needed to build enough private pension wealth for decades of rent can become unfeasible, particularly for people who start later or already face low earnings and high housing costs.

A pension pot is therefore not an adequate measure on its own. The useful question is how much income remains after housing, tax and essential spending have been paid every year through retirement.

Housing tenure is only part of the problem. Household structure matters too.

A couple can share rent, utilities, insurance and many other fixed costs. A person living alone carries them alone. The PPI finds that single pensioners, particularly renters, face the sharpest adequacy risks and are roughly twice as likely as couples to fall below minimum Retirement Living Standards.

Current poverty rates underline the pressure. The report cites rates of around 35% among private-renting pensioners and 34% among social-renting pensioners, compared with 12% among owner-occupiers.

This matters even for people currently planning as a couple. Bereavement, divorce or separation can turn one shared housing cost into one person's responsibility while also reducing household pension income. A robust retirement plan should therefore test both the expected household and a surviving-single-person scenario.

There is no single pension number that solves this problem. The practical response is to make housing an explicit, changing part of the retirement cashflow rather than hiding it inside a broad spending estimate.

The PPI report combines current rules, forward projections and modelled reform options. They should not be treated as interchangeable.

The PPI states that it provides evidence rather than recommending a particular direction of policy. Its central conclusion is that no single lever will be enough. Pension policy, housing, welfare and household circumstances interact.

Sources: GOV.UK workplace pension contributions; GOV.UK Housing Benefit eligibility; PPI report.

The PPI's findings are uncomfortable because they expose a structural problem. The people most likely to rent in retirement are often the same people with weaker pension saving, interrupted employment, caring responsibilities and less access to inherited housing wealth.

Higher pension contributions could improve outcomes for some workers. They cannot, on their own, make high rents affordable for everyone. Housing supply, security of tenure, welfare support and the treatment of different household structures also matter.

For individuals and couples, however, waiting for policy is not a plan. The immediate task is to stop using a homeowner's retirement benchmark if you expect to rent or carry a mortgage. Build the housing cost into the cashflow, test what happens when it rises, and compare the choices still available to you.

As we explain in Why retirement is really cashflow planning, the size of a pension pot is only one part of the answer. Timing, income, spending, tax and household changes determine whether the plan works in practice.

Planiva can help you build a baseline that includes ongoing housing costs, then compare alternative retirement dates, spending levels, income assumptions and household scenarios. The aim is not to predict 2044 perfectly. It is to find out which assumptions your plan depends on, while there is still time to respond.

Planiva provides planning and scenario modelling. It does not provide regulated financial advice, recommend pensions or housing products, or determine benefit entitlement.