Spending

Elderly UK tenants forced to cut spending as cost of living soars | Property rental

Almost two-thirds of renters over the age of 65 have cut overall spending due to the cost of living crisis, and campaigners warn older people who don’t own their homes are particularly vulnerable to the rise bills.

Research shared with Guardian Money by the charity Independent Age sheds light on the struggles of older tenants who struggle to cope with rising household costs.

Its survey found that 62% of renters over 65 needed to cut general expenses and were more likely to do so than their contemporary landlords.

A quarter said they would not be able to afford a £10 per month increase in living expenses, while 71% said they would not be able to afford a £50 increase. More than half said they felt worried about their finances.

The state pension rose 3.1% last month, well below the 7% inflation rate recorded in March. Energy bills have risen at the same time and with a further increase likely in October, economists have predicted that inflation could top 10% before the end of the year.

“Older private tenants are particularly vulnerable to soaring inflation – particularly where rents have also risen,” says Dan Wilson Craw, deputy director of campaign group Generation Rent.

“Unlike homeowners, who are likely to have paid off their mortgage, they still have housing costs. If landlords want to raise rent to reflect the wider market, there’s not much current tenants can do. For retirees on fixed incomes, this reduces their disposable income or forces them to relocate.

Independent Age’s survey of 2,000 adults in England over 65, of whom 391 were tenants, found that 57% of tenants reduced their heating, 42% said they reduced the amount of food and drink they they bought and 29% bought less fuel for their vehicle. .

In addition to these most essential purchases, 46% said they had reduced their purchases of clothes and shoes, and 39% had reduced their social activities.

Separate figures from Shelter show that between fiscal years 2020-21 and 2021-22 there was a 20% increase in the number of over-65s contacting its helpline who were at risk of homelessness.

Francisca, 64, and her husband, Colin, 70, say their rent has gone up more than 7% this year. They are struggling to cover that and the other bills they face, despite the cuts. “When we go to the supermarket, we buy the cheapest from the bargain,” she says. “We take fewer baths, fewer showers, we turn off the lights, even in cold weather, we turn off the heating.”

Although the couple chose to rent because, Francisca says, “we don’t know what the future holds,” she says it left them vulnerable. They have lived in substandard housing in the past while paying high rent, were evicted in a “no-fault eviction” under Section 21 by a previous landlord, and have also had trouble with rental agencies. This has made them very nervous about what will happen when their contract ends next March.

Their age has financial implications. “At our stage in life, we have a lot of money and if we live a long time, we have to stretch it during that time,” she says. “We can’t go to work from 9 a.m. to 5 p.m. or have new careers, so we rely on freelancing.”

Independent Age Policy Manager Morgan Vine says older tenants are “left in increasingly precarious financial situations” and need government support and protection.

“Our research found that older tenants are one of the groups most at risk of falling into poverty after retirement age and are more likely to live in long-term poverty,” she says.

“From day to day, we also know that older renters are at increased risk of living in poor quality homes, and therefore face higher costs and greater financial insecurity than other groups.”

Vine says older tenants have shared their concerns with the charity about high rents and that their landlord could sell at any time. “With the cost of living crisis squeezing people’s budgets from every angle, those worries will only get worse,” she says.

Tenants make up the minority of households in England with a head aged 65 or over, according to the latest official figures. The latest data shows that there are 5.5 million homeowners in this age bracket, and 5.1 million own their own home, meaning there are no monthly mortgage costs. There are only 382,000 households in the private elderly-headed sector, and 1 million in the social rental sector.

Housing associations were allowed to raise rents by 4.1% in April, and many tenants who rent from their homes have seen increases. In the private rental sector, it is not easy to see what happens to existing leases, but newly advertised contracts usually cost more than a year.

Polly Neate, managing director of Shelter, says older tenants are likely to have low incomes, which would mean pressure from rising costs.

“With skyrocketing bills and the highest private rents ever, it’s no wonder our emergency helpline is picking up the phone for older tenants who, instead of preparing for the retirement, are facing homelessness. No one should have to choose between eating or paying the rent,” she says.

Wilson Craw says: “The state pension has risen less than inflation, but it’s worse for private tenants who rely on housing benefit, which has been frozen since 2020. If these people pay higher rents, this money could come from the rest of their income. And that’s before we even think about rising energy prices.

“We need a rent freeze and a further suspension of evictions to protect tenants during this crisis.”