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Home Finance Renting ruins retirement dreams as single parents and self-employed also struggle

Renting ruins retirement dreams as single parents and self-employed also struggle

by uma


  • Latest data from the HL Savings and Resilience Barometer shows only 42% of households are on track for a moderate retirement income.
  • On average only 19% of renter households are on track for a moderate retirement income. This compares to 54% of homeowners.
  • Single parents also struggle with only 17.5% of households on track compared to 46% of households with two parents.
  • Self-employed households also lagged with only 25.5% of households on track.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown:

“We are seeing signs that our long-term financial resilience is slipping, and some groups are undoubtedly feeling the pinch more than others. Renters, single parents and the self-employed are already lagging behind their coupled-up home owning peers when it comes to preparing for retirement and the longer the cost-of-living crisis continues the more exposed they are likely to be.

Much has been made of soaring house prices in recent years, but rents have also been on the rise, trapping people in a terrible spiral that undermines their financial resilience. Paying higher rent makes it harder to save a deposit so you either don’t get on the housing ladder or you get on it later. This then means more people are either paying a mortgage into retirement or paying rent for life – this is a massive ongoing cost that can have a huge impact on people’s financial resilience in both the near and long-term.

Single parents are also struggling due to a toxic mix of having to juggle higher costs and finding it harder to find work that fits around child caring responsibilities. Having to pay housing costs and childcare as part of a couple can be onerous enough but for a single person it can wipe out every spare penny and leave precious little to save for retirement.

The self-employed also risk being woefully underprepared for retirement as they are not covered by auto-enrolment and are less likely to save into a pension. This is a long-term issue that needs to be addressed whether that be through pensions or through increased awareness of products such as the Lifetime ISA, which benefits from a government top up and the ability to access money in times of financial stress, albeit with a penalty.

However, the cost-of-living crisis has undoubtedly made matters worse – just six months ago almost 28% of self-employed households were on track for a moderate income. This has since weakened to 25.5% as high inflation continues to make a severe dent in savings.”