A REMINDER FOR all Irish adults living with their parents – don’t chew with your mouth open.

This was the tone of a (likely) well meaning and (extremely) misconceived video which blew up across social media during the week.

It was an open goal for opposition politicians, one that they happily kicked straight into, with all parties taking a turn to get their licks in.

As such, it sucked up almost all the oxygen around the housing crisis this week. While very understandable, it means that a more worrying story flew under the radar. 

Back on Monday a new survey which found that the number of over-65s renting their homes has doubled since 2011.

In the interest of clarifying sources – it is worth noting that the firm which released the study, Royal London Ireland, sells pensions and life insurance products. It has an interest in getting people thinking about retirement.

But the figures it cites are accurate. And the underlying trend it highlights is very real – the number of Irish pensioners renting in the private market has spiked in recent years. Driven, of course, by the surge in housing costs.

In a nutshell – this risks turning into a social catastrophe. 

Ireland’s pension system works on the assumption that people have essentially zero ongoing housing costs by the time they retire.

Once that no longer holds true, the whole system is at risk of falling apart.

Numbers doubled 

Let’s look first at how widespread the issue is.

The Royal London Ireland survey reported how the number of over 65s renting has ‘doubled’.

This data is based on the CSO (Central Statistics Office), which found that about 8,500 ‘households’ headed by someone aged over 65 were renting privately as of 2011.

It also found that this doubled to 17,000 by 2022, with the spike starting from 2016 on. Ireland’s overall population rose by about 12% over the same period.

One new factor that the Royal London Ireland survey highlighted is that this is an older-age phenomenon.

The raw number of people renting aged under 35 actually dropped between 2011 and 2022, with high rents likely forcing many to either move home or live with their parents.

But there was a noticeable rise in the number of private renters in every age group from 35 and up.

The median age of a housebuyer in Ireland is 39, a number which has been steadily rising. The people still in the private rental market who are 40 plus are likely those with serious affordability issues, who may never be able to purchase a home.

The trend is only going one way. Ireland’s overall home ownership rate is predicted to fall close to 60% by 2035, a dramatic decline compared to a high of more than 80% around the turn of the millennium.

Risk to system 

Going back to why this matters – pensioners in Ireland aren’t *supposed* to rent in the private market.

Last year the Pensions Council published a report which looked at how much money people would need to maintain a decent standard of living upon finishing work.

It found that someone wanting to get by on the least amount of money possible – essentially, having just their basic needs covered – would need at least €1,600 per month.

However, there’s a gigantic asterisk – the report assumes that monthly housing costs (*including utilities*) are just €600.

Needless to say, the number of private tenants covering their rent and bills for €600 per month is likely close to nil.

This means that this group – older people, particularly over 65s, who are renting – will be at serious risk of falling into poverty.

The ESRI even quantified this in a study a few years ago. It found the proportion of over 65s living in income poverty after paying housing costs was 14% as of 2022.

It warned that this could more than double to 31% if home ownership rates continued to fall sharply. And it’s predicted that they will. 

This is a massive chunk of the country, and it could continue to grow as Ireland’s population ages.

With more pensioners pushed into housing poverty and still renting, it’s very likely there will be a rise in over 65s house sharing.

There are already reports of this in London, with retirees navigating splitting a home with 20 and 30-somethings.

Solutions

So what can be done about it?

Well, the ESRI study linked above had a stab at a few solutions.

One was the wider rollout of cost-rental housing. This is a much better option for tenants, where rents are at least 25% below the market rate, and aim is to only cover development and maintenance costs.

Ireland has started building out this type of affordable housing in recent years, but the scale is too modest.

Since 2021, about 4,500 cost rental homes have been ‘made available’. The numbers are moving in the right direction – about 5,000 more are planned by the end of 2027 – but it’s still not enough to cope with demand.

It’s also not a measure targeted at the over 65s – people of any age can apply for cost rental. And there are normally hundreds of applications for every single unit.

Looking specifically at older renters, the ESRI recommended that households be supported to ‘build up more retirement resources’. 

Again, this is something that the government has done with the rollout of auto-enrolment pensions.

But that measure has been sold as one to help people maintain their existing standard of living into retirement – not as an absolute necessity to avoid slipping into poverty.

Wrong direction 

Finally, the ESRI suggested that the state could support people’s incomes, to help them pay private rents later in life.

This is already happening to some extent – it’s estimated that state spending on rent subsidies has increased to €700 million in recent years, as tenants increasingly struggle with price inflation.

The obvious question then is – just how much money can the state spend subsidising rents?

Again, this was raised by the ESRI, which warned that untargeted supports could be “very expensive, and would likely have considerable deadweight”.

The subsidies themselves also risk fuelling rental inflation, leading to a perverse feedback loop which results in consistent higher spending.

The best approach would likely be some mix of massively increasing the likes of cost rental, alongside measures to improve the overall home ownership rate.

But things are trending in the wrong direction.

Forget young adults being advised how to live at home. In the not so distant future, we’re more likely to see government-shared videos of them giving tips to their parents on how to set up rent vacancy alerts.