A recent government Office for National Statistics report reveals that renters who rent or have mortgages face greater chances of financial vulnerability compared to those who fully own their homes.
Renters are approximately five times more likely to experience financial vulnerability than homeowners. Additionally, they allocate a larger portion of their disposable income towards rent (21%) compared to mortgage holders who allocate (16%) towards their mortgage payments.
Among homeowners, older individuals are more likely to possess their homes outright. However, findings from the English Housing Survey reveal that 25.5% of all social renters and 6.8% of all private renters are retired.
The data also indicates that 7.0% of owner-occupiers aged 65 to 74 are still repaying their mortgages, along with 2.3% of those aged over 75.
Regarding the rising cost of living, the most frequently cited reasons for increases include food shopping (96%), gas or electricity bills (57%), fuel prices (37%), and rent or mortgage expenses (27%).
Helen Morrissey, a business consultancy analyst at Hargreaves Lansdown, highlights the ongoing cost-of-living crisis that continues to exert financial pressure, especially on renters who are particularly susceptible to rising expenses.
The data reveals that renters face a significantly higher likelihood, around five times more, of experiencing financial vulnerability compared to those who own their homes outright. However, individuals still repaying a mortgage are also exposed to increased risks.
While older age groups are more likely to have paid off their mortgages, the recent English Housing Survey indicates that many still bear these costs. A notable portion of retired individuals, comprising over a quarter of social renters, and seven percent of owner occupiers aged 65 to 74, are still making mortgage repayments.
“People with mortgages can anticipate the end of payments, whereas for renters, the ongoing costs, coupled with substantial rises in food and fuel expenses, can create tremendous challenges in life.
The significant surge in house prices over time has made it increasingly difficult for individuals to enter the property market. They either get onto the ladder at a later stage or not at all, resulting in far-reaching implications for their financial stability across all age groups. The burden of high housing expenses further hampers younger generations’ ability to save, including setting aside sufficient funds for a comfortable retirement income.”
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