Source · Select Committees · Work and Pensions Committee
Recommendation 39
39
Acknowledged
Rising number of private renting pensioners are at increased risk of poverty from Local Housing Allowance.
Conclusion
The Pensions Policy Institute expects the number and proportion of pensioners renting privately to grow from around 6% now to 17% in 2041. As many as 400,000 households could become dependent on means-tested benefits. Pensioners renting privately are already at risk of poverty, with the operation of the Local Housing Allowance a contributing factor. (Conclusion, Paragraph 184)
Government Response Summary
The government explained the Local Housing Allowance (LHA) and mentioned its increase in April 2024, alongside the availability of Discretionary Housing Payments. It also detailed a new Social and Affordable Homes Programme and noted that the upcoming Long-Term Housing Strategy will consider housing for older people.
Government Response
Acknowledged
HM Government
Acknowledged
The Local Housing Allowance (LHA) determines the maximum housing support for tenants in the private rented sector. It ensures that households, including pensioners, in similar circumstances living in the same area are entitled to the same maximum rent allowance regardless of the contractual rent paid. LHA rates are not intended to cover all rents in all areas. The Secretary of State for Work and Pensions regularly reviews the LHA. This review of the LHA includes his obligations to consider the public sector equality duty which includes the protected characteristic of age. The April 2024 one-year LHA increase to the 30th percentile of local market rents cost an additional £1.2 billion in 2024/25, and approximately £7 billion over 5 years. For those, including pensioners, that need further support with rent costs, Discretionary Housing Payments (DHPs) are available from local authorities (LAs). DHPs can be paid to those entitled to Housing Benefit or Universal Credit who face a shortfall in meeting their housing costs. DWP continue to work with MHCLG as they develop their Long-Term Housing Strategy. Any future decisions on LHA policy will consider a range of factors, including impact of the rental market, and be taken in the context of the Government’s missions and challenging fiscal environment. MHCLG have confirmed a new 10-year £39 billion Social and Affordable Homes Programme to kickstart social and affordable housebuilding at scale across the country. Our ambition is to deliver around 300,000 social and affordable homes over the programme’s lifetime and the core strategic objective of this new programme will be to maximise supply – particularly of Social Rent homes, with a target to deliver at least 60% of the homes under the programme as Social Rent. This ensures we are prioritising delivery of the most affordable homes to help lift families, including older people, out of poverty. MHCLG are also considering the role of older people’s housing in the upcoming Long-Term Housing Strategy, which will be published later this year. The strategy will set out a long-term vision for the housing system, where everyone can access a safe, secure, decent and affordable home.