Long-term renting could risk “ruining” retirement resilience, according to analysis from Hargreaves Lansdown, which found that just under a fifth (18%) of renting households are on track for a moderate retirement, compared to 51% of homeowning households.

The analysis also showed that renting affects the resilience of all age groups, as only one fifth of Millennial/Gen Z households who rent are on track for a moderate retirement income, compared to 51% of homeowners.

Renting in retirement was a particular concern for Gen X households though, as the research found that only 15% of households who rent are on track compared to 56% of homeowners.

Commenting on the findings, Hargreaves Lansdown head of retirement analysis, Helen Morrissey, said: “It’s no secret that getting that all important first step on the housing ladder is getting harder, but long-term renting risks leaving our retirement resilience in ruins.

“Spiralling house prices have made it much more difficult to buy your first home. People are either buying later or not at all, and those that do get that all important toehold on the ladder are often taking longer mortgage terms so they can keep their costs low.

"This is having an enormous impact on people’s ability to prepare for retirement as many more people approach and enter retirement still paying housing costs.

"This not only impacts their ability to save, they also need to save much more to account for the fact they have to pay these costs into retirement. You can see the enormous impact this is having on people."

Younger people could see some improvements in future, as Morrissey said it is to be hoped that over time more of these households will become homeowners and can free up income to help them get on track.

“Younger people can make use of products such as the Lifetime ISA to help them build up a decent deposit," she added, acknowledging however, that Lifetime ISAs are only available to people aged between 18-40 so older savers can’t make use of them.

“The picture gets decidedly grimmer the older you get," she added. "Only 15% of Gen X and Baby Boomer households who rent are on track for a moderate income and with the clock ticking down to their retirement many risk having to make some tough decisions around needing to work longer or reducing their retirement expectations to make ends meet.”

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