Renters are expected to retire with £2,000 less in annual income, according to Barnett Waddingham.
A new report by the consultancy, that surveyed over 5,000 people, has found evidence of the financial disparities between homeowners and renters.
The former are expected to generate an average retirement income of £21,000, with the latter having less at £19,000 annually.
Additionally, renters were found to have less financial stability.
Barnett Waddingham found that only 12% of renters have clear financial goals, compared to 18% of homeowners.
Conversely, 18% of renters have no financial goals while only 11% of homeowners are in the same position.
According to Barnett Waddingham, these findings pose questions about the financial disadvantage this is putting renters at.
“There have been calls to allow people to use their pension savings to pay for a house deposit, but this goes against the need to accumulate as much as possible before retirement,” the consultancy noted in its commentary accompanying the findings.
“Policymakers need to create a better framework that allows someone to save tax efficiently for a house deposit as well as for pension income.”
“Alternatively, if there are structural ways - like home equity release - for housing to form part of the retirement framework, then combining the two may be possible.”
“What’s clear is that this issue won’t just go away; we need direct intervention to protect this at-risk renting cohort.”
