Millennials in the United Kingdom are losing hope of ever owning a home and are facing homelessness by the age of retirement due to the exorbitant rise in house prices, mortgage rates and rental costs.
According to the Guardian, more than 630,000 millennials will be unable to afford to pay private rent costs when they reach retirement since it will cost more than half their income. Unless there are many more affordable homes built within the next thirty years, retired millennials could face homelessness, depending on their families for housing or could be forced to live in social housing or temporary accommodation. Any debts taken to cover the cost of living will be passed onto your relatives upon death.
Primarily, most people’s income is reduced when they no longer have a full-time job. Many young people today could struggle to retire unless they can start putting money aside for the future. However, it is demotivating to know that even that won’t be enough to have a secure home to grow old in.
The quality of affordable homes is significantly dropping where many are unsuitable for living in and can cause death or health problems. Many old people succumb to winter because of how cold their house becomes without proper heating and insulation. Some people avoid using heat at all because they want or need to save on electricity bills. The number of homeless pensioners is set to increase, and there isn’t enough help available. Young people are juggling multiple part-time jobs or freelancing to get by, and they do not have a proper retirement scheme that would secure their future, even if they continue renting instead of buying a property.
Renting apartments or houses has become a permanent solution for many people, but it is not a good long-term strategy. Contracts and leases can change at any moment. A landlord could decide to sell their property or move in themselves, by evicting the person who is renting it. This could be a significant disruption in a person’s life where they suddenly must search for other accommodation. Even if there are other options, they probably can’t afford it because prices keep increasing.
Even older people are struggling as much as the younger generation. The government does not provide enough social housing. People are forced to move around instead of settling down and retiring in one place. The chief executive of the National Housing Federation, Kate Henderson, said “Our latest research shows that the government must invest 12.8 billion pounds in building new social housing every year if they are to ensure all generations have somewhere secure and affordable to live.” (The Guardian, 2019)
People are currently given no other choice than to live in horrible conditions with insecure tenancies because they have nowhere else to go. Many elderly people do not have families to rely on and often suffer from loneliness and poverty. Millennials are also worried that instead of having their own property, they might end up straight in retirement homes in the future. There is too much financial stress on people, and there is no light at the end of the tunnel. This is an urgent matter which is not being taken care of. If the government did invest in social housing, they would have to ensure that they are good quality homes where the elderly won’t freeze to death. They also need to lower utility bills so people wouldn’t hesitate to use heaters during summer to stay warm.
Retirement homes have been putting people off because of all the news regarding elderly abuse. The government should place stringent laws where these organizations are forced to pay their staff fair wages and improve living conditions. People are not expecting luxury resorts to stay in but having a place that is not damp and mice infested, isn’t asking for too much. Having safe and livable accommodations is a fundamental human right, though a lot of people have lost sight of that fact.
Even if people do brave the freezing temperatures and try to sleep on the streets, they are not allowed to do so. Benches end up having guard rails and shop fronts put spikes on the floor to prevent anyone from seeking shelter or lying down. Thus, the question is, if the government does nothing, where are all these people supposed to go? If they cannot manage the current level of homelessness, what will they do when millions more people become homeless as well in the upcoming years?
There are things you can do…
Rent reality, preparing for the future with pensions
If you’re looking at continuing to rent into retirement, you’ll potentially require the same annual income you earn today and possibly even more to cover, pretty much, existing expenses. That is the same amount of rent you’re paying today and all utilities and bills. It’s a substantial amount of money required. Although many organisations offer basic rate pension schemes, you can work with financial experts who can better advise ways in which you can manage and potentially grow your money through investment opportunities.
Trying to get on the property ladder…
We appreciate its easier said than done. But if you’ve yet to own a property before, there are lots of opportunities to help you get on the property ladder. From share schemes, lower deposits and incentives like abolished stamp duty and lower fees, there are various ways you can get your hands on your own property with a minimal deposit. With a more skeptical financial market, a mortgage is less likely to leave you worse financially. So, starting with something small and building on it is a quick way to help you jump onto the property ladder and watch your money grow.
Whether you’re looking to grow your savings and investments, or look at ways in which you can get on the property ladder, we’ve some articles to help you achieve your goals- check them out below. Whatever your financial goals, it may be worth meeting with a financial adviser that will offer you a free, introductory meeting to see what you can do to better your financial future.