That’s according to Hargreaves Lansdown, which said that renters are less financially resilient than remortgagors.
The investment platform found that over two-thirds of tenants have poor financial resilience. This compares to a quarter of remortgagors.
They earn less on average too – renter incomes average £31,617 per household, compared to £49,279 for owners and £57,818 for mortgagors.
Lack of savings
Only 43% of renters have enough emergency savings. This compares to 71% of mortgagors and 87% of those who own their home outright.
Renters are also left with less at the end of the month, said Hargreaves Lansdown. They have just £193 left, compared to mortgagors with £353 and outright owners with £398 left over.
Retirement shortfall
The study revealed that not only are renters financially vulnerable now, they are less likely to be on track for a moderate retirement income.
Only 18% of renters are on track for a moderate retirement income, compared to 55% of mortgagors and 51% of outright owners.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Renting ruins your financial resilience even more than having to remortgage at a time of sky-high interest rates. Life was already tough enough for tenants, but with average rents up around 10% in the past year, millions are having the life squeezed out of their finances altogether.
“Average rents tend to be lower than average mortgage payments – and private rents tend to be similar to mortgage payments – but renters are on lower average incomes.
“The average household with a mortgage earns almost twice as much as the average household that rents (83% more). It means their housing costs swallow a much bigger slice of their income.”
