Easy ways to top up your income in retirement

Published by Rachel Lacey on 27 May 2015.
Last updated on 27 May 2015

Grow money

Take in a lodger

Thanks to the government's Rent a Room Scheme you can earn up to £4,250 a year tax-free by letting a spare bedroom and taking in a lodger. Unsurprisingly, rooms in Greater London earn the most, providing a typical monthly income of £345, while a room in the South East will give you around £278.

In Yorkshire and Humberside, you can expect £266 or around £200 if you live in the Midlands, according to research from LV=. The insurer found that the number of homeowners taking in lodgers has doubled since 2009, and while opening your home up to a stranger is not to be sniffed at it may be a lot less disruptive than you'd expect.

With increasing numbers of people working away from home, there is a big demand from lodgers who only want a room for the working week, meaning you get your house to yourself over the weekends and still have space for visitors. Websites such as Mondaytofriday.com exist to match this sort of lodger with willing homeowners.

Alternatively, if you don't want to rent a room to someone you have no connection with why not ask around friends and family to see if they know anyone in need of a room? Whoever you let to, always check references and inform your home insurance company.

Rent your car

If your car spends more time in the garage than on the road, why not earn some extra money by renting it out? Easycarclub.com (part of the easyJet family) matches up car owners with people who need a car from time to time. According to the club, owners who rent out their car regularly can earn as much as £250 a month.

Naturally, as the owner of the car you are in the driving seat and can control who it is rented out to and when, whether you allow smokers or pet owners to use it and how much they pay (the club does provide guidance and suggests a market rate). To protect you and your car, comprehensive insurance, protected no-claims discount and RAC roadside assistance and recovery are all included.

Rent your drive

Another way to help out fellow motorists and earn a bit of extra cash is to rent out your drive – if you have more space than you need. This can be particularly profitable if you live close to a city centre, train station, airport, hospital or sports or entertainment venue – anywhere where there is a demand for parking or where spaces are either limited or expensive.

You can provide long- or short-stay parking, strike up one off agreements or provide a regular home for someone else's car. It all depends on how much space you have and whether you ever need access to the space.

Again, websites exist to match motorists with homeowners and include JustPark.com and yourparkingspace.co.uk. Parking rates are well below what private and public car parks charge – providing the appeal for motorists - but rates are still high enough to give your income a sizeable boost.

According to JustPark, a typical daily rate on a driveway close to St Albans City Station – a popular commuter spot with fast trains to London - is £5.25. Get a commuter to park there five days a week, and you are looking at a monthly income of £105.

Alternatively, if you live close to an airport - you can target holidaymakers and business travellers for longer-term stays. In the Gatwick area, prices average at just over £5 a day but if you are willing to give your customer a lift to the airport you may be able to up your prices a bit more.

Rent out your belongings

Space isn't the only thing you can rent. If you have a shed or garage full of tools, decorating, camping or gardening equipment why not rent those out too, rather than leaving them to fester? There are plenty of people out there that don't want to splash out on expensive equipment such as pressure washers or power tools for one-off jobs and would rather rent them for a fraction of the cost.

Check out sites such as rentmyitems.com and uk.zilok.com to find out what other people are renting and see if you could join the 'collaborative economy', too.

Find out everything you need to know about the new pension freedoms and how to plan ahead for the retirement you deserve with the new issue of How to Retire in Style. The magazine is available to buy now from all leading newsagents, priced at £4.99. It can also be ordered online here for £6 including postage and packing.

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