Only 18 per cent of renters are on track for a moderate retirement compared to 55 per cent of mortgagees and 51 per cent of outright owners, research from Hargreaves Lansdown has revealed.
The research, Hargreaves Lansdown Savings & Resilience Barometer for January 2024, showed that renters are less financially resilient than recent remortgagers.
Additionally, the barometer reported that 43 per cent of renters have emergency savings, compared to 71 per cent of mortgagees and 87 per cent of those who own outright.
Hargreaves Lansdown head of personal finance, Sarah Coles, said: “Renting ruins your financial resilience even more than having to remortgage at a time of sky-high interest rates.
“Life was already tough enough for tenants, but with average rents up around 10 per cent in the past year, millions are having the life squeezed out of their finances altogether.”
The barometer also found the average income of renters was £31,617 per household, compared to £49,279 for outright owners and £57,818 for those with a mortgage.
Coles spoke on the impact of this, stating it was taking a “massive toll” on the short-term financial resilience of renters.
She said renters have around £193 left at the end of the month, and they save just 4 per cent of their income.
This is compared to those with mortgages who save 5 per cent and have £353 left at the end of the month.
As a result of this, fewer than half of renters have enough savings put aside compared to almost three quarters of those with mortgages.
However, Coles clarified that it’s not just the short-term resilience of renters that are suffering as “they’re so busy making ends meet that they're falling worryingly short when putting money aside for their future too”.
This is a particular issue for renters who will need to save more as they will face “much higher costs in retirement”.
tom.dunstan@ft.com
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