Renting in Retirement and Wildlife Bank Notes

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1:27Hello, welcome to this Moneybox podcast. The cost of electricity will rise from the 1st of July, so why is British Gas slashing the amount it pays homeowners when they sell back electricity from their solar panels? And the Bank of England is rewilding its banknotes. Gone are the humans, bring on the animals. But first, 6 million people who expect to be paying for their housing into retirement say they do not know how they'll afford it. A survey seen exclusively by Moneybox found that nearly half of all tenants see no end to paying rent after they stop work, and affording it is a constant worry.

2:05People like 54-year-old Moneybox listener Joanne from the Midlands. I am really worried about it. I realised about five years ago that this was going to be the situation. So, so long as I can pay off my debts by the time I get to retirement, at least I'll be in a better situation. but the other thing that I'm looking at at the moment is either getting a boat or a motorhome so that I've got an option of living somewhere. The research was done by YouGov with the mutual pensions and investment firm Royal London. It asked more than 4 ,000 people about their housing expectations once they give up work.

2:41An estimated one in three adults in the UK are already paying or expect to pay rent or a mortgage once they've retired. Moneybox's Jan Whitworth's been looking into this done well speaking to people like joanne paul who was quite frankly brave enough to share her story really brought home just how serious a situation this is for according to this research many millions of others like her so joanne's got small number of very small private pensions and the state pension of course but right now in her mid-50s she's only able to afford to rent a room in a house share as she's trying to cut costs to pay off several thousand pounds of debt so she's doing the right thing, taking control of her finances, being very careful with spending.

3:22But the idea of buying a house, she says, is just completely out of reach. Well, ideally, I'd like to own a home, bricks and mortar. I have tried to get a mortgage about five years ago, but I wasn't able to do that. Not even one of the renter's mortgages. At the end of the day, my last place that I lived I was there nearly eight years and it cost me nearly£50 ,000 in rent in that time. And when she sold last year, I had nothing to show for that. So, Dan, does Joanne see a realistic way out of this? Well, it's really hard, Paul. I mean, she's in her mid-50s and only really recognised just how difficult her situation was a few years ago.

4:05And she says realistically that leaves her with very few options. I've still got 14 years till I retire. so I'm just trying to look ahead and do what I can do now so that I'm in a better position by the time I retire but the work I've got at the minute is temporary and I have been applying for other jobs but I know that there's a lot of competition out there the place where I'm at at the minute they were interviewing for a job and they had 200 applicants just for one job so I hadn't realised how high the competition is out there. Well the earlier you start planning the more time you've got to try and change things think about what choices you make with your money what choices you make with your housing I mean sometimes life happens and that really affects your housing as well and you know you just never know how things are going to go but the earlier you start the more options you've got.

5:08Start planning for retirement early. I mean, that's good advice, Dan, but too late for many. And as Joanne found, hard to get a job at that age. Yeah, very much so. And you know what, Paul? Joanne is not alone. I've been speaking to another listener, Alan, from North Yorkshire. So he's 63, lives on his own in rented accommodation. Now, he's got a reasonable pension and some decent savings. But just like Joanne, he's far away from owning his own home, even though he's hopeful about possibly getting an interest-only mortgage. that he expects would be cheaper than renting. When I was 16, I was thinking I'd have 2.4 kids, a dog, a wife, live happily ever after on a big fat pension, retiring when I'm 60 with a house paid off.

5:54But life happens. Relationships change. Choices get made. Some were smart. Others were not so smart. But now it's hard. It's hard considering that I might end up renting and that is unsettling. There's no control. That was Alan Mills ending Dan's report. With me in the London studio is Sarah Pennells, a consumer finance specialist from Royal London. Sarah Pennells, Joanne, Alan, just two people from what your research at Royal London indicates is millions of older people. Well, that's right. I think it's quite hard to hear just how worried they both are. They articulated very well how concerned they are about paying their rent in retirement.

6:40I think it's one of these conversations that probably a lot of people haven't had or they haven't thought about because historically there was probably an expectation that you'd be mortgage-free when you retired. You stopped work and you also stopped paying for your housing. But we know that people aren't saving enough for their pensions, for their retirement, for the kind of lifestyle they want, never mind paying rent and particularly private rent. And when companies do assessments of what you need in retirement, they often say what you need, but that's before housing costs. And they assume older people won't have housing costs.

7:15They'll be homeowners. But as your research shows, that's not the case for millions of people. Absolutely right. And there are, I say, about 18, 19 million people who are either paying rental mortgage now or expect to. Now, it is the minority of people who've retired already who are paying rental mortgage in retirement. but our research is showing that twice as many people who are young homeowners or young renters expect to have those housing costs as people in their 50s and 60s. We know people are buying houses later, buying property later, they're taking out mortgages over a longer term and far fewer of them are getting on the property ladder and when they do they're more likely to rent privately than in social housing.

7:53Yes, so it's a problem that's not going to go away, it's going to get worse, isn't it? Unfortunately it is, yes. What are the particular problems tenants have in retirement? Joanne says she spent£50 ,000 over eight years on nothing and she has no security. And that's partly the problem, isn't it, that you've got no security or very little even now, but you have to pay the rent and it's out of a much reduced income. It is. So if you are going to be paying rent in retirement, then you are going to need a much bigger pension pot. But again, our research shows that people who expect to have either rent or mortgage payments that they make in retirement have approximately half the pension pot of those people who are going to be mortgage-free.

8:34So those pension pots are generally smaller, but their costs in retirement are going to be bigger. And it's not just what's happening to the housing markets. It's also the way society is changing. More people live on their own, either through choice or, as Alan said, through life events happening. And for those people, living costs when they're working tend to be higher and retirement costs tend to be higher as well. And things have changed. We've had an email or a message on X from Elaine. Paying the rent on a pension is going to be a huge problem for me down the line. So she's worried about it now.

9:09Once, rents would have been affordable. Her nana, she says, used to rent a long time ago and that was fine. Things have changed, haven't they? And maybe people haven't caught up with that. They have changed because people who were renting decades ago, more of them would have been renting in social housing where the rents tend to be firstly lower and secondly more predictable. I think what we're seeing is this wave of people who are renting privately either through choice or through circumstance, and the rents there tend to be higher and they tend to change more frequently. And of course before 1989 people had rents that they couldn't be evicted except for very serious things, and rents were protected, weren't they?

9:48But it all changed at that time, which is the difference. Joanne, 54, and she's living in a house share it is cheap, but what do you think her prospects are realistically when she reaches pension age? Well it's difficult to hear about the choices she's having to make and also the amount she's already spent on rent for somebody who is in their 50s or approaching retirement I mean the first thing to do is to try and see where you are so get as informed as you can find out what's in your pension now what are you going to get when you retire what will you get from the state pension Can you or should you maximise that?

10:22Are there any lost pensions that you've lost contact with that you can track down? Also think about your assets in the round. So retirement isn't just about pensions if there's any other money. But there's no doubt that there are people and our figures back this up for whom that gap between what they have saved now and what they thought their life in retirement would be like and the life they're heading for, and particularly the housing costs they're going to have to pay is probably too big for them to bridge at a later stage in their lives. Sarah Pennells from Royal London, thanks very much. Cheers to fall savings at Whole Foods Market, home of higher ingredient standards.

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11:57Now, a record number of solar panels are being fitted to homes and businesses across the UK. And last year's record is forecast to be beaten again this year as electricity prices rise on July 1st and the war in the Middle East threatens higher prices in the future. Solar panels on your roof, though, don't just help reduce your electricity bills. You can also sell any spare energy back to your supplier, making money to help with the cost of living. Craig installed solar panels on his home three years ago. Since then, he's been selling electricity back to British Gas, his supplier, to 15.1 pence a unit, making as much, he says, as£120 a month over the summer.

12:36but British Gas recently told him that payment was being cut. I got an email letting me know that from the 6th of July the payments were being re-established to be fair and in line with the energy market. I hoped this would be that they were going up and I was quite looking forward to it but unfortunately reading the email that I received they're going down. I set a fixed price a couple of months ago and my fixed electric cost overnight went up by a third and yet my payment from them to me is going down by three pence. The export tariff, that for me was a way to offset some of the cost of the solar panels and a way for me to plan for the future financially and if that continues to go down eventually I won't be paying them back because the amount that I get for them has gone down so dramatically.

13:32Obviously, it could go the other way. But at present, the only evidence I've seen is this one price decrease. Well, listening to that is Madeline Gabriel, Director of Sustainability at the charity Nesta. Madeline Gabriel, Craig's smart export guarantee payment, as it's called now, that's what British Gas pays per unit to buy electricity from him. That's going to fall from 15.1 to 12 pence from the 6th of July. And yet, as I said earlier, British Gas is raising its prices on the 1st of July, the cap rate rising nearly 6 % to 24 pence odd a unit. That's more than double what they're paying him. He's puzzled by this.

14:10And I have to confess, Madeline, I am to explain it. I can see where the confusion will come from because energy pricing is confusing. Energy suppliers have to offer a rate that pays solar users for the energy they export, but they can set that rate wherever they like. And some suppliers will set those tariffs to reflect market rates. Now, what we have to bear in mind is that in the summer, we often have an excess of solar energy. And at the specific times when solar panels are generating most, the market rate actually tends to be quite low. Some other suppliers will offer rates to their customers that are higher than the market would pay.

14:46And that's really to attract customers. Now, people with solar PV are quite likely to be good customers. They often pay their bills in time. They might be interested in other services. So those suppliers want to lure those customers in and they'll pay more than the market would have paid. But effectively, these are loss leading rates. So companies might choose to cut them over time. And I expect that's what's behind British Gas's decision. And is British Gas alone in this or are other suppliers cutting the rates they pay? There have been some other cuts recently, but there also are still some higher paying smart export guarantee tariffs on the market.

15:18So it is worth shopping around, particularly if you're also willing to change your energy supplier. And there are also some sophisticated tariffs that vary every half hour with market prices. If you've got a battery and you're up for managing your export a bit more actively, you can actually make more money using one of those tariffs. Yes, you say there are better rates. I mean, I was looking at them and one of them was only paying fourpence. So people who are on those very lowest rates certainly should perhaps be looking for a better deal. They definitely need to shop around. Of course, Craig said this payment was he was using it to help pay the cost of the installation, which is quite hefty, isn't it, up front?

15:51How much does it cost to install solar panels on your roof now? Roughly, if you get solar on its own and you're an average household, it'll cost somewhere in the region of six and a half thousand pounds. If you pair it with a battery, you might be paying nine to ten thousand pounds. Right. So the batteries to store the energy you don't use and then give it back to you when you need it. Is that how it works? That's right. And that can really help with the cost of the kit, actually, because for an average household without a battery, they might use maybe 25 to 40 percent of the solar energy they generate and then sell the rest back to the grid.

16:24With a battery, you can raise that self-use up to something like 70 percent and then you will be saving more. Yeah, so it is wasting that energy. What's the payback period, though? Because, I mean, you said they were better customers and presumably it's partly because they're going to stay there until they've paid it off. But what is the payback period for solar panels? Well, first of all, you can certainly change your energy supply, even if you've got solar panels. You're not tied to one supplier. But the payback period for solar on its own is somewhere in the region of 11 to 13 years. And if you pair it with a battery, that rises slightly because you're paying more for the kit, 12 to 14 years.

16:58So do you think the cuts in this payment, this guaranteed payment back, the export payment, is going to put people off? Well, it will make the payback a little bit longer. But as I've said, you can get value from your system other ways. So particularly if you can use more of that energy you generate, you can bring your pay back down. And as you mentioned, energy prices might change in future. If electricity prices go up, the saving from a solar system compared with what you would have paid without will be bigger. And let me ask you briefly, I mean, the government's talked about this being part of its push towards clean power, but they don't give you grants to help pay for solar panels.

17:33Very briefly, in a few words, why not? In short, because the market's already doing well. As you said, we were hitting a record year and there's no real need to subsidise it, which we'd have to pay for as taxpayers or bill payers. Madeleine Gabriel from Leicester, thanks. And if you have solar panels or thought about getting them, tell us your experiences, moneybox.bbc.co.uk. Now, from an emperor dragonfly to a great spotted woodpecker, what creatures would you like to see on the new Bank of England banknotes? As we reported a few weeks ago, there's a plan to replace the humans on fivers, tenors and so on with other species on the next series of English banknotes.

18:11And when we asked you then, a lot of you sent us your suggestions. The hedgehog was the overall winner among those who responded. And it is on the shortlist, chosen by a panel of wildlife experts for the Bank of England. 17 other creatures alongside mammals, birds, amphibians, insects, fish. No reptiles or mollusks for some reason. But if you have a strong view... The vote is officially... Well, after voting opened, our reporter Jo Krasner took the shortlist to Liverpool and asked some people there which creature they would like to see on their folding money. Now I'm showing you pictures. What would you like to see on your banknotes?

18:49So you've got a choice. You've got two from each category. The marsh butterfly, because it's beautiful and it suggests freedom to me. and a barn owl because that suggests wisdom and community. We're also thinking about the grey seal because it's a very curious mammal and I'm feeling very, very curious at the moment politically and socially. I'd pick up my£5,£10 notes and feel curious where am I going to spend my money today. So will you actually vote? Will you put a vote forward? I will now, absolutely, yeah. I'd like a bottlenose dolphin and a red fox for mammals. I've always liked the calmness and the coolness of a dolphin.

19:27I just think foxes are wild and crazy and very intelligent. I do quite like the bottom-nosed dolphin to be fair, so that could be a good choice. The grey seal's calling to me. I do think it would be quite amusing to have a grey seal on a banknote. I think it's good that you can vote because it's quite a controversial decision to get rid of Winston Churchill in the first place, I think, to at least let us vote what to replace him. I think that's a good way of sort of drawing a compromise about it all. I like butterflies for family reasons, so I think a butterfly would be a good choice too. And it's quite tasteful, I think, for a banknote.

19:56For birds, I'd like a barn owl and a white-tailed eagle. I do a lot of Tai Chi and the barn owl and the owl is kind of part of our movements. And a white-tailed eagle. Who couldn't like a white-tailed eagle? So now you know that you can vote, is that something you would do? You have up until July the 3rd. Yeah, 100%. I think it'd be cool to be able to have your say in what goes into the money and kind of personalise it in a bit. And as for me, well, if I had to choose one, it probably would be the bottlenose dolphin because they are beautiful, graceful, and what I like in particular is they're very chatty.

20:32Thanks, Jo, and we'll have you chatting to the winning animals in a few months' time, I'm sure. Well, one thing won't change on the new notes, the signature of the Bank of England chief cashier, which guarantees that the notes are worth what they say they are. The current chief cashier is Victoria Cleland, and I'm delighted that she's with me in the London studio today. I'll get my banknotes and have you to sign later, Victoria. And Victoria Cleland, why are you swapping famous humans for a variety of other species like insects and fish? One of the key things we're trying to do with our Bank of England banknotes is to make sure that they're really secure so the public can trust them, which means that we're always updating the security features to make them really resilient against counterfeiters.

21:12When we change the features, we want to change the images. This time round, we thought, well, let's ask the public, what would they most like to see on the Bank of England banknotes? Had a consultation last year, about 44 ,000 members of the public voted, and nature was the overwhelming winner, and from that we've moved to animals. The replacement of historical characters, though, particularly as we heard Sir Winston Churchill, has been a bit controversial. Does it feel a bit silly to replace Jane Austen or Alan Turing with a frog? I don't think it's silly at all. I mean, the public really love animals.

21:44I mean, just listening to some of the clips there, the way that some people resonate with them in terms of what goes on in the family, some relate them to sport, some relate them to the way they think. So I think there's a real buzz that people can get through wildlife. And it is so important to our whole ecosystem. We were going to change the characters anyway. This time we asked the public, would they like to see something different? And they said yes. You're a bit behind now, aren't you? Wildlife appears on notes from the Royal Bank of Scotland already. The mackerel, the otter, the red squirrel, the osprey.

22:13you're doing yours you say they're harder to forge why are animals harder to forge? So the two things we're doing here one is moving to much higher technology in terms of security features at the moment we've got holograms and things that are hard to counterfeit we want to make it even more difficult and at the same time we think that the movement in animals can be really great in creating security features that the public can recognise we can get more movement for example slightly flapping wings or legs running yes and there are three categories to pick from just to go on the practicalities of this mammals birds and then lumped together amphibians insects and fish people pick two out of each so they pick six there are four notes how will you choose for five of the ten of the twenty and the fifty notes how do you how do you divide them up so we're really really keen to hear the views in the public so our consultation runs until the third of july you're right we've got three categories four notes.

23:10One of the things that we're really keen to do is to make sure that we have enough range of animals and enough range in the background so that it's really easy for people to understand which note is which, what security features to look like. So if all of them were, for example, living in the sky, it might be harder for people to recognise. So we just want to have that bit of flexibility to get the right environment. You seem to be saying it's not going to be the popular vote, that it won't be the creature that gets the most votes necessarily? I'm very much hoping that the four that get the top votes will actually work really well as a set.

23:45We're really keen to get the public's views. We just need to make sure that the four work together. The fox face may not win. And who's going to have the final say on this? Is it you? No, it's not me. It's Andrew Bailey, the governor of the Bank of England. He'll make the final decision once we've sort of fed back all of the views of the public, spoken to designers to make sure how they'll work as a set. And we've also been working with a fantastic set of wildlife experts from around the UK. So they'll be helping you too. People have said to me though, and we talked about this before, that cash is declining, isn't it?

24:23Only about one in seven people use it as the way they prefer to pay for things. Are you spending a lot of money on a major redesign of notes that by the time you issue them will be used even less? I think there's still a really strong future for cash. The number that you've quoted in terms of those who it's their preferred means of payment, for some people this is the only way that they have to pay. Sometimes it's preferred for budgeting reasons, some people it's much more easy for accessibility, it can be used with carers, people with disabilities. So we think it's really important to serve that group but also we're increasingly seeing people have it as a sort of contingency store of value.

25:01Last year there were some big power outages in Spain, Portugal. Cash could be used there. So cash is still alive and kicking, so we want some animals alive and kicking on it. Still king for some things. And just in a word, when will these new notes be seen? When will they come into circulation? There's a number of sort of steps to take around the end of the decade. Around the end of the decade, right. We'll have you back then, Victoria Cleanon. Thank you very much. And Dan's still here. Dan, which would you choose out of curiosity? Right, OK then, Paul. So my first pick would be Kingfisher. The clue's in the name.

25:34It's a king. The white-tailed eagle and probably the brown hare. But I've got to say, Paul, hedgehog comes a close second. And to be fair, you know what? I'd be glad to see any and all of them on there, our banknotes. I actually think celebrating nature in this way is a wonderful, wonderful idea. Victoria's smiling at that. And me? Well, the bumblebee. Beautiful creatures, they fly in a way that seems to defy aerodynamics and they do so much pollination. So that's my choice. The trouble is they're not very cuddly, so I'm not sure they'll win. Now to vote, just search online for the new Bank of England notes and you have until July the 3rd.

26:09Well, what I'd like to know is why we don't have a word like fiver or tenner for a£20 note or a 50. Send us your ideas about that, or of course, anything to do with money, or indeed frogs. Email moneybox at bbc.co.uk You can also send a voice note or message to us on WhatsApp 0306 783 183. We do read them all and you might get on the show, which, of course, you can also hear live and first on BBC Radio 4 at midday on Saturdays. In this podcast, the reporters were Dan Whitworth and Joe Krasner, researcher Catherine Lund, studio manager Amy Gallagher. Our editor is Jess Quayle. I'm Paul Lewis and this was a BBC News money and work production for BBC Sounds.

26:52and I'll just buzz off while you listen to this. I'm Kate Lamble and from Understand from BBC Radio 4, this is Rinsed. Last time I was here, there was a tampon and there was a condom. A sewage scandal damaging our rivers. We had an enormous range of animals in the garden and that also started to disappear. Uncovered by ordinary folk taking on powerful people. And they told me, there's nothing wrong with the river Windrush. Basically, go away and stop troubling us. This is the story of how a centuries-old battle between public good and private profit created an almighty stink. And who pays to clean it up?

27:38Rinsed. Listen first on BBC Sounds. And I thought, nah, you're the problem.

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