Homeownership drop to create £8bn benefit bill
The cost of housing benefit for elderly people will soar by £8 billion a year by 2060 unless steps are taken to address falling homeownership, a think tank has warned.
The Strategic Society Centre predicts there will be 3.45 million pensioners claiming housing benefit by 2060 costing the state £13.45 billion a year in today’s prices.
It used projections of homeownership rates and government forecasts on the size of the pensioner population in 2060 to come up with the figures.
James Lloyd, director of the Strategic Society Centre, said: ‘It’s time that we stop wringing our hands about “generation rent”, and recognise that in the long term, the state is going to be left with a very large bill to pay.
‘Given the extra cost the Treasury will face, the government should be taking aggressive measures now to boost rates of homeownership among the young.’
People forget most pensioners who rent rely on state support, he added, so if more pensioners are renting in the future the cost of housing benefit to the state is going to ‘explode’.
Official government figures show there are currently 1.45 million retirees claiming housing benefit, costing the state £5.32 billion each year.
A Joseph Rowntree Foundation report published earlier this month found an extra 1.5 million 18-to 24-year-olds will be forced into the private rented sector in eight years time.
Kay Boycott, director of campaigns, policy and communications at housing charity Shelter, said: ‘This report shows the frightening consequences of soaring housing costs.
‘Government must take urgent action to make the cost of homes more affordable for families, or face a benefit bill that can only grow bigger.’