Renting in Retirement Could Cost £419,000 — and Most Pension Pots Fall Far Short

The renting in retirement cost facing the average UK pensioner has been quantified at £419,000 over a standard 20-year retirement, according to new research from Standard Life — a figure that exposes a structural gap at the heart of how most people plan for later life.

The projection is built on Office for National Statistics (ONS) private rental data, which shows average UK rents currently sit at £1,160 a month. Applying Standard Life’s 3.8% annual growth assumption, drawn from ONS monthly private rental figures, that rises to £2,350 by 2046. Against that trajectory, the average pension wealth for someone aged 65 to 74 was just £145,900 in 2022, per ONS data — less than 35% of what renting alone would cost over a two-decade retirement.

What Renting in Retirement Actually Costs, Region by Region

The national average obscures a sharp geographic divide. London is the most expensive place to rent in retirement, with annual costs of £28,520 and a projected total of £859,000 over 20 years. The South East follows at £17,610 a year, or £531,000 in total. At the other end, the North East is the cheapest region at £9,670 a year and £291,000 over a full retirement. Yorkshire and the Humber comes next at £10,650 annually, or £321,000 in total.

The table below draws on Standard Life’s regional analysis for the remaining UK regions, showing Year 1 annual rent and projected 20-year total under the 3.8% growth assumption.

Even in Wales, the cheapest non-devolved nation in the table, the projected total exceeds three times the average pension wealth for a 65-to-74-year-old recorded by the ONS in 2022.

The Living Standards Gap That the Numbers Reveal

The Pensions UK Retirement Living Standards set a minimum income of £13,900 a year for a single retiree and £32,700 for a moderate lifestyle. Critically, those benchmarks assume housing costs are already covered. For a retiree renting in 2027, housing alone could add around £13,910 to annual outgoings, pushing the income required to reach even a minimum standard of living to £27,810 a year — roughly doubling the baseline figure.

Pete Cowell, head of annuities at Standard Life, put it plainly: ‘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.’

Standard Life’s ‘Retirement Voice 2025’ survey found that 82% of current retirees own their home outright. That majority position is unlikely to hold as the next cohort ages through. Standard Life’s analysis of the Pensions Commission’s interim report shows the share of households renting privately in retirement has risen from 4% in 2003-4 to 10% in 2024-5.

The trajectory ahead is steeper still. Research from the Association of British Insurers (ABI) projects that one in three pensioner households could be renting by 2044. Separately, Letting Agent Today reports underlying research suggesting the number of pensioners renting could rise by 1.3 million people over the next two decades, with most of that growth concentrated in private rentals. The ABI’s own July 2026 report finds the projected increase is heaviest among couples in the lower half of the income distribution.

Catherine Foot, Director of the Standard Life Centre for the Future of Retirement, framed the systemic issue directly: ‘Renting in retirement is set to become far more common in the years ahead. That exposes a fundamental flaw in our current pension system, which is built on the assumption that housing costs fall in later life. With a quarter of 60–65-year-olds already living in poverty, a rise in renting risks pushing even more retirees into financial difficulty.’

There are genuine reasons some retirees choose to rent: flexibility to relocate closer to family, freedom from maintenance costs, and no exposure to the illiquidity of property. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, noted: ‘If you decide to rent, then you have the flexibility to move around without the burden of having to sell a home.’ Homeowners, meanwhile, carry the option of equity release or downsizing, and face lower monthly outgoings once a mortgage is cleared.

The harder question is how many future retirees will be renting not by preference but by default, and whether a pension system calibrated for homeowners can stretch to cover the difference. The next test arrives when the Pensions Commission publishes its full recommendations: whether auto-enrolment contribution rates are revised upward will determine whether the gap starts to narrow or continues to widen.