Should I consider a retirement village?

Upscale retirement villages can be very appealing: you can live independently alongside like-minded peers with access to top-notch facilities. And if something goes wrong, you’ve got the peace of mind that support is on hand.

However, before you’re sold on the world of retirement villages it’s important to get the full picture and weigh up the pros and cons.

What is a retirement village?

A retirement village is a housing development specifically built for older buyers, usually aged 55 or over. 

There’s often a range of luxury facilities for residents, including swimming pools, hair salons, gyms, libraries and restaurants.

Plus, there’s on-site care support provided, so it’s like sheltered accommodation that meets a country club.

Who might decide to live in a retirement village?

If you 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’ll no longer need to worry about house maintenance or keeping the garden in order – that’s all taken care of – and instead, you can spend your time meeting new friends for lunch, a swim, or even a wine-tasting evening (Maybe you might also consider investing in wine?). 

Single buyers may also feel safer living in a retirement complex than 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.

The pros and cons of retirement villages

Retirement villages are designed for older people to enable them to be independent for as long as possible. However, it’s important to be aware that while 24-hour onsite support might be 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 might find it hard to adjust to living in a smaller property.

Others may bristle at community living, not relish being surrounded solely by others or prefer to have a more diverse mix of neighbours.

What’s more, if you buy a property in a retirement village, it’s likely to be leasehold, with all the possible associated complications. Learn more about the differences between leasehold and freehold. 

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 bucolic view that clinched the deal is about to become phase two of a development.

The advantages of a retirement village

If your top priority is a hassle-free home for which you don’t mind paying a premium, then a retirement village could be the perfect solution.

The benefits include:

• Freedom: You can live independently in a property you own.
• Amenities: 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.
• No responsibilities: Maintenance of the properties, communal areas, facilities and gardens are usually dealt with for you.
• Security: Access to the village is likely to be controlled, with staff on hand in an emergency.
• Couples can stay together: If you and your partner have different care needs, this 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 eyeing up a retirement village with many fancy facilities, be aware you will need to pay for them 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 and until the property is sold. 

Things to watch out for include:

• Cost: 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, you will need to pay for it.
• Reduced space: Your new home may be smaller, meaning you might not be able to bring all your furniture and possessions.
• Service charges: Expect to pay monthly or annual management fees to help maintain the communal areas and facilities.
• Extra fees: Check for any unexpected fees hidden in the small print. 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 – sometimes, these can run to tens of thousands of pounds. You may also need to pay into a ‘sinking’ or ‘contingency’ fund.
• Selling the property: Homes in retirement villages can take a long time to sell and could potentially become a burden to your family or those left managing your estate.
• Resale value: Specialised retirement homes, such as those in retirement villages, may sell for far less than expected or even at a loss.

What are the typical costs of buying in a retirement village?

The price of living in a retirement village will, naturally, vary according to the property in question as well as the location and facilities available.

However, because of the luxe lifestyle they offer, they’re usually sold at a premium and you can expect to pay more than you would for a comparable property in the ‘real world’.

Retirement village properties are typically sold as leaseholds. This 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 communal areas, the services of a house manager or caretaker, cleaning costs, building maintenance and repairs.

As an idea of cost, a review from HomeOwners Alliance reported that two-bedroom apartments in McCarthy Stone’s ‘Heathlands’ in Farnham Common, Buckinghamshire, start at £399,950, but you’ll need to budget for service charges, which will set you back £119.60 a week (or £6,219.20 a year).

One-bedroom apartments, meanwhile, at Ledian Gardens, by Inspired Villages, in Maidstone, Kent, start at £356,000 and service charges for a couple would be £9,083 a year.

Unfortunately, brochures and websites don’t always tell you how much your service charges will be - in these cases, it’s worth asking for this information as soon as possible.

They can be expensive and so it’s important to understand how much you will need to pay before you get too heavily invested in a particular village or property.

How do I choose the right retirement village?

When weighing up potential retirement villages, think about what you need from your 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 a slick sales pitch.

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/service charge?
• What does the management fee include?
• Do I need to pay into a contingency fund?
• Are there guest facilities for family members, and what is the cost?
• Do you provide transport to the nearest town or village?
• Is there 24-hour cover, and will I have an emergency call system in my home?
• What care packages are available, and how much will they cost?
• 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 make 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 your upkeep. 

Sheltered housing - a group of self-contained flats or bungalows you can buy or rent, with a warden on site - is another option.

If you need assistance with personal care, you can apply to your local care for a care needs assessment. This will tell you what help you need, while a financial assessment will tell you if you are entitled to any help with costs.

Should you require long-term care, you could arrange care in your home or move into a residential care home where all your care needs will be met by trained care assistants.

It’s a good idea to talk to a financial adviser if you are considering buying a new home or are worried about how you will pay for care. They can also help you with many other areas of retirement planning.

If you found this article helpful, you might also find our article on how to avoid care home fees informative, too.

Need help with long-term care?

Long-term care can be stressful to think about, but it’s worth planning in advance and getting expert guidance.

Unbiased can quickly match you with a qualified financial adviser specialising in long-term care who can help you make the right decisions based on your unique circumstances.