The UK pension system was built on an assumption that no longer holds for a growing number of retirees — that you would own your home outright by the time you stopped working. For more and more older people, that assumption is crumbling. The Pensions Policy Institute projects that the proportion of households headed by someone over 65 in private renting will almost treble to 17% by 2040. That shift means a retirement income that once looked adequate suddenly has to cover rent, not just bills and groceries.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The trend is not marginal. Under-25s now make up 26% of the flatshare market, down from 32% a decade ago, while renters aged 45 and above have climbed to 16%, up from 10% in 2015. The proportion of flatsharers who are 65 and above has tripled in the past decade, now accounting for 2.4% of the market. These are not lifestyle choices for most — they are responses to a housing system that has left older renters with fewer options. The legacy of Margaret Thatcher’s right-to-buy policy, introduced in 1980, plays a role: more than 40% of homes sold under that scheme are now privately rented, reducing the stock of affordable social housing that earlier generations could rely on. For anyone approaching retirement without a paid-off home, the financial gap is not small. Here’s what you actually need to know.
What home-sharing in retirement actually looks like
The central concept here is intergenerational home-sharing — older and younger adults living together in a shared property, often through platforms like SpareRoom or Cohabitas. It is not the same as a retirement village or a care home. Residents have their own bedrooms and share kitchens, living rooms, and bills. The oldest person Cohabitas has helped find a flatmate was about 88 years old. What I tend to notice is that people assume this is a fringe arrangement driven by extreme hardship. The data suggests it is becoming a mainstream option for a generation that entered retirement without the housing security their parents had. If you are approaching retirement without owning your home, this is worth understanding before you need it, not after.
What the numbers say about older renters and shared housing
The financial gap between owning and renting in retirement is not abstract. The Pensions Policy Institute conservatively estimates that someone needs about £180,000 more in their pension pot to cover the cost of renting a one-bedroom flat through later life. That figure assumes a basic private tenancy, not a luxury one. For context, the average defined contribution pension pot at retirement in the UK is well below that amount for most people. The gap is not small — it is the difference between a comfortable retirement and one where housing costs eat up most of your income.
Here is what actual older renters are paying. Deborah Herring, 65, a retired teacher, pays £1,000 a month for a room in a four-bedroom flatshare in Bermondsey, south London, covered by her teacher’s pension and part-time work as an A-level examiner. Andreas Savva, 68, pays £800 a month for a mould-ridden flat in east London that worsens his ankylosing spondylitis. Tamara Kocsubej, 63, recently paid £950 a month for a room in a three-person Airbnb because she could not find a stable shared rental. These are not outliers — they reflect the market for older renters in and around London, where housing costs routinely exceed what a full State Pension alone can cover.
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| Housing scenario | Typical monthly cost | Who it works for |
|---|---|---|
| Private renting alone | £800–£1,000+ | Those with large pension pots or rental income |
| Shared housing (flatshare) | £500–£950 | Older renters who want lower costs and company |
| Lodger in your own home | Income up to £7,500/yr tax-free | Homeowners who need extra income and company |
| Co-housing community | Varies (own home equity used) | Those who can buy into a shared-ownership scheme |
The table shows the range, but the key point is that the pension system does not adjust for housing tenure. Someone renting in retirement needs a significantly larger income than someone who owns outright, yet the State Pension, workplace pensions, and means-tested benefits are not designed with that gap in mind. If you are approaching retirement without home equity, the numbers demand a different plan — one that accounts for rent as a fixed, ongoing cost rather than an expense that disappears at age 65. A financial advisor can help model what your specific housing costs would look against your pension income, but the starting point is knowing that the standard retirement income calculators probably do not reflect your situation.
Where the system falls short for older sharers
The pension system ignores housing tenure
The UK pension system assumes people reach retirement without housing costs. That assumption is increasingly unrealistic. The PPI’s projection that 17% of over-65 households will be private renters by 2040 means nearly one in five retirees will need to fund rent from their pension. The consequence is straightforward: someone renting in retirement needs a pension pot roughly £180,000 larger than a homeowner with identical outgoings. Most people do not have that headroom. The system has not caught up with the shift in housing tenure, and individuals are left to bridge the gap themselves.
Accessibility is an afterthought in shared housing
Only 12% of households headed by someone over 75 in England have step-free access to their home. Age UK reports that 44% of over-50s are worried about accessibility in their homes. For older renters in shared housing, the problem is worse — most flatshares are in older properties without adaptations. It takes an average of 247 working days to get a disabled facilities grant approved and the work completed. That is over eight months of waiting while living in a home that may be actively harmful to your health. Andreas Savva’s experience — paying £800 a month for a mould-ridden flat that worsens his condition — is not unusual. The system for adapting rented housing is slow, underfunded, and poorly suited to older tenants who do not own their home.
The right-to-buy legacy keeps compounding
Margaret Thatcher’s right-to-buy policy, introduced in 1980, allowed social housing tenants to purchase their homes at a discount. More than 40% of those homes are now privately rented, according to the PPI. That means the stock of affordable social housing that earlier generations of retirees could rely on has been significantly reduced. Older people who did not buy under right-to-buy — or who could not afford to — now face a private rental market with far fewer affordable options. The policy’s effects are still shaping retirement outcomes four decades later, and they will continue to do so as the cohort of older private renters grows.
Age discrimination in flat-hunting is real
Sarah, a 55-year-old paralegal from Surrey, was forced to leave her bedsit after 12 years when her landlord wanted the house back. She found flat-hunting brutal and received rejections she interpreted as ageist. Tamara Kocsubej, 63, says she checks SpareRoom all day, every day, struggling to find a room in a shared house where her age is not an issue. The research does not quantify how widespread age discrimination is in the flatshare market, but the pattern across multiple personal accounts is consistent. Older renters are not always welcome in shared housing, and the platforms and legal protections have not fully addressed this.
That 2.4% figure sounds small until you consider it has tripled in a decade and is concentrated among those who did not own a home entering retirement. The growth rate, not the current share, is what signals where this is heading.
How to make shared retirement housing work
Finding the right arrangement
Platforms like SpareRoom and Cohabitas are the main entry points. Cohabitas was founded specifically for older adults seeking shared housing — Nick Henley started it after his father died and his mother was left alone in a three-bedroom house. The platform reports that 18% of the last 5,000 people who registered said they would be open to living in an intergenerational home. The key is to be specific about what you need: ground-floor room, en-suite, pet-friendly, quiet hours, or shared meals. Carol Willment, 80, sold her retirement flat in 2024 and moved in with 60-year-old Louise in January 2025. They share routines — roast dinners, Tuesday food shopping with the over-60s discount, and TV binge days. The arrangement works because they were clear about expectations from the start.
Financial and legal considerations
If you are taking in a lodger, the Rent a Room scheme lets you earn up to £7,500 a year tax-free. If you are the lodger, you need a tenancy agreement that protects your rights — especially around notice periods, deposit protection, and access to common areas. The legal status of a lodger is different from a tenant, and the protections are weaker. If you are entering a shared housing arrangement with friends, a written agreement covering bills, cleaning, guests, and how to handle disputes is worth having before issues arise. A tenant and landlord lawyer can review any agreement before you sign, which is particularly important if you are older and the arrangement is meant to be long-term.
Co-housing and intentional communities
Co-housing is a step beyond flatsharing. Residents own their own homes but share communal spaces — kitchens, libraries, laundry rooms, gardens, and lounges. Jenny Borden, 77, and Wayne Borden, 87, moved to Marmalade Lane, a multi-generational co-housing scheme in Cambridge. They own their property but share a communal kitchen, library, and allotment. The community is self-managed via a Slack channel and working groups. Still Green, a co-housing project for over-50s in Wolverton, Buckinghamshire, is set to complete in 2028 after 15 years in development. Ronny, 52, and her partner Brian plan to pool a £500,000 budget to buy a property with private living units and shared spaces — a large lounge, home cinema, professional kitchen, and outdoor barn for events. Co-housing requires capital to buy in, but it offers a middle ground between owning alone and renting with strangers.
What is changing and what to watch
The PPI forecasts that the proportion of over-65 private renters will almost treble to 17% by 2040. That is not a distant projection — it is 15 years away. The housing sector is unprepared: only 12% of households headed by someone over 75 have step-free access, and the disabled facilities grant process takes nearly a year. Policy changes around pension adequacy, housing benefit for older renters, and the availability of accessible housing will determine whether this trend becomes a crisis or a managed transition. For now, the individual burden falls on those approaching retirement without home equity. If you are in that position, the time to explore options is before you need them, not after your lease runs out. A real estate lawyer can help clarify your rights as an older renter, and a business law specialist can help if you are considering a co-housing purchase with others.
- Check your State Pension forecast and NI record — every qualifying year matters when every pound counts toward rent
- Research shared housing platforms (SpareRoom, Cohabitas) and filter by age-friendly criteria
- Get a written tenancy or lodger agreement reviewed by a solicitor
- Visit any potential shared home in person — check accessibility, damp, noise, and house rules
- Model your retirement budget with rent included — use the PPI’s £180,000 figure as a benchmark
- Consider co-housing schemes in your area and get on waiting lists early
Frequently asked questions about sharing a home in retirement
Can I get Housing Benefit if I rent a room in a shared house after State Pension age? ▾
What happens if my landlord sells the house while I am living there as a lodger? ▾
Is the Rent a Room scheme still available if I am over 65? ▾
How do I find other older adults who want to share a home? ▾
What is the difference between co-housing and a retirement village? ▾
The cost of waiting to plan for housing in retirement
The PPI’s forecast that 17% of over-65 households will be private renters by 2040 is not a prediction about the distant future. It is about people who are in their 50s now, making decisions about pensions, savings, and housing that will determine whether they own a home or rent one in retirement. The gap between those two outcomes is roughly £180,000 in pension pot value — and that gap widens the longer you wait to address it. The pension system has not adjusted to the reality that a growing number of retirees will need to fund rent from their income. That means the burden falls on individuals to plan for a scenario the system does not fully account for. If you are approaching retirement without owning your home, the options exist — shared housing, co-housing, lodger arrangements — but they work better when you explore them before you need them.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Retirement on a budget: maximising your money without sacrificing your dreams.
Sources and Further Reading
Is your pension enough? 5 ways to boost your retirement income — Practical steps for closing the gap between what you have saved and what you will need.
Second careers: can part-time work enhance your retirement income and wellbeing? — How part-time work can supplement a pension that does not cover housing costs.
The Guardian (2026). Rise of Britain’s multigenerational flatmates. 🔗
The Guardian (2025). Rise of older renters: housing crisis and home ownership. 🔗
The Telegraph (2025). Get on like a house on fire: retirees home-sharing. 🔗
