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Should you consider a retirement village?

4th March 2024

The idea of independent living in an upscale development with lots of fun facilities, people of a similar age to socialise with, and access to support if you need it, has strong appeal. However, before you opt for retirement village living, it’s vital to weigh up the pros and cons.

What is a retirement village?

A retirement village is a housing development with a difference – it’s built specifically for older buyers, generally aged 55 and over, and often comes with a range of luxury facilities for residents such as swimming pools, hair salons, gyms, libraries and restaurants. Plus, there’s on-site care support provided – think sheltered accommodation meets country club.

Although retirement villages are a relatively new concept in the UK, the industry is growing rapidly as more and more well-heeled retirees are choosing to enjoy their golden years living independently in bespoke, stylish surroundings.

Who might decide to live in a retirement village?

If you’re still hale and hearty and you’ve got the cash – this style of living doesn’t come cheap – and want to enjoy a luxury lifestyle in later life, with the reassurance that support is available as your care needs grow, then a retirement village may be just the ticket.

You can say goodbye to things such as house maintenance or keeping the garden in order – that’s all taken care of – and instead focus on meeting new people in your age group for lunch, a swim, a Zumba class or a wine-tasting evening (Maybe you might also consider investing in wine?). Adding to the appeal, older buyers tend to feel safer living in a retirement complex than they would living alone.

There’s no doubt that retirement villages have a lot of advantages – but they come at a cost. Make sure you (and your solicitor) read all the small print thoroughly and get answers to some key questions before you sign up.

The pros and cons of retirement villages

Retirement villages are designed for older people to enable them to be independent for as long as they’re able to. However, be aware that although 24-hour onsite support is available, care packages aren’t included and you’ll have to pay extra if you need them.

And, while having luxury facilities on your doorstep is a treat for many, some people may find it hard to adjust to living in a small apartment – and bristle at the whole concept of cheek by jowl community living. Others may not relish the thought of being surrounded solely by other silver foxes, preferring to have a more diverse mix of friends and acquaintances.

What’s more, if you buy a property in a retirement village, it’s likely to be leasehold, with all the possible associated complications. And, no matter what the glossy brochure says, it’s important to do the same due diligence as you would for any other home purchase, for example, asking your solicitor to do local searches. You don’t want to move in and find the countryside view that clinched the deal is about to become phase two of the development.

The advantages of a retirement village

If your top priority is a hassle-free home that you don’t mind paying a premium for, then a retirement village may be the perfect solution. Benefits include:

You can live independently in a property you own.

Most retirement villages have a wide range of social and leisure facilities.

Social life
There are likely to be endless opportunities to socialise with other residents of a similar age with shared interests.

No responsibilities
Maintenance of the properties, communal areas, facilities and gardens are usually dealt with by the scheme provider.

The community aspect of retirement villages may feel safer than living alone.

You can stay together
If you and your partner have different care needs, this type of arrangement may suit both of you.

Future care
Some sites offer home help and personal care or even on-site care homes that you can move into if you need round-the-clock care.

The disadvantages of a retirement village

If you’re living in a retirement village with lots of fancy facilities, be aware that these are paid for by residents in the form of service charges, which can swiftly stack up and eat into your retirement income. What’s more, these charges may still be payable by your family after you die until the property is sold. Things to watch out for include:

Homes in retirement communities are generally more expensive than properties on the open market.

Limited medical care
While there may be staff onsite 24/7, not all retirement villages offer medical care and, if they do, it will be charged extra.

Reduced space
There may not be room for all your possessions and furniture.

Service charges
Expect to pay monthly or annual management fees towards maintaining the communal areas and facilities.

Extra fees
Check for any unexpected fees that may be hidden in the small print of complicated leases. These include so-called exit fees, also known as ‘event fees’, or ‘deferred management fees’, and are paid once the property is sold after the owner has died or moves into full-time care elsewhere. Be warned – in some cases, these can amount to tens of thousands of pounds.

Resale value
Specialised retirement homes such as those found in a retirement village can end up selling for far less than expected, or even at a loss.

Selling the property
These type of homes may take a long time to sell and can be a burden to family members left to deal with the estate.

What are the typical costs of a retirement village?

Prices vary depending on size, location and facilities. However, because of the luxe lifestyle they offer, they’re usually sold at a premium and will cost you more than a standard property of a comparable size.

Retirement village properties are typically sold as leaseholds. These means you only own the building, not the land it’s on, for a set number of years. According to Age UK, most leasehold retirement properties now come with 999-year leases, which removes some of the worry about having to arrange costly lease extensions. However, you’ll have to pay ground rent and management fees to cover the upkeep of and utility bills for communal areas, the services of a house manager or caretaker, cleaning costs, building maintenance and repairs.

As an idea of cost, McCarthy & Stone’s Nightingale Place, overlooking Clapham Common in London, features 94 apartments plus pool, cinema, restaurant and health club, with prices ranging from £665,000 to £1.6 million. The management fee each month is around £1,000.

The company’s Glenhills Court in Leicester provides a restaurant, lounge, sun terrace and care provisions. A two-bedroom apartment is around £225,000. Service charges range from £136.52 per week for a one bed and £181.74 for a two-bed apartment.

Audley Retirement Villages’ St Elphin’s Park in the Peak District features 127 properties, starting from £225,000, and provides a restaurant, bistro bar, health centre and fitness suite. There’s also £500 annual ground rent and a monthly service charge of around £730.

How do I choose the right retirement village?

When weighing up potential places, think about what you really need from a retirement home and the things that are most important to you. When you’ve narrowed down your options, it may help to write out a list of questions to ask when you visit so you don’t get swayed by slick sales patter. For example:

– What is the age limit and does it apply to both partners in a couple? 

– Can I bring my car and will I have a designated parking space? 

– Can I bring my pets and are there any restrictions?

– How much is the management fee and when is it paid?

– What does the management fee include and what is extra?

– Are there guest facilities for family members and what is the cost?

– How far away is the nearest village or town and is transport provided?

– Is there 24-hour cover and will I have an emergency call system in my home?

– What care packages are available and how much are they?

– What’s the exit fee and are there any other fees I need to know about?

What are the alternatives to a retirement village?

You can stay in your current home and introduce adaptations as and when you need them, such as stairlifts, handrails and walk-in baths. Or you could downsize into a more manageable property and use the extra cash to hire a gardener, cleaner and handyperson to help with the upkeep. If you need assistance with personal care, social services will provide you with a care package, or advise you about moving into sheltered housing – typically a group of self-contained flats or bungalows that you can buy or rent, with a warden onsite. If you require long-term care, you could move into a residential care home where all your care needs will be met by trained care assistants.

It’s a very good idea to talk to your financial adviser well in advance of making any decisions like these, so you can explore the costs and benefits with the help of an independent expert. Your IFA can also help you in many other areas of retirement planning.

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