‘£8 billion’ bill for older people’s housing benefit

The government will have to spend an extra £8.13 billion on housing benefit for pensioners each year by 2060, according to a think-tank report. The rising number of older people, and changes in the housing market, are the main factors.

The report looks at how trends in longevity and tenure will affect the future cost of housing benefit for older people in the very long term.

Key points

  • By the time someone aged 20 in 2010 has reached the age of 70 in 2060, the number of pensioners will have increased from 12.6 million to 18.8 million.
  • Assuming downward trends in owner-occupation continue, 40 per cent of these pensioners will by then be in rented housing.
  • By 2060 there will be 3.76 million pensioners claiming housing benefit. The government will have to spend an extra £8.13 billion on housing benefit for pensioners compared with today, totalling around £13.45 billion each year.
  • The debate on declining rates of home-ownership needs to recognise these long-term implications for public spending. Given the costs involved, the government should take ‘aggressive’ measures to boost rates of home ownership.

Source: James Lloyd, The Future Cost of Housing Benefit for Older People, The Strategic Society Centre
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