First-time buyers struggling to find the deposit their mortgage lender requires will be able to tap into the pension pots of their parents and grandparents, under plans outlined by deputy prime minister Nick Clegg.
The so-called ‘pensions-for-property scheme’ will effectively allow pension pots to act as a form of guarantee for first-time property buyers, providing banks with more confidence to lend them larger sums of money.
Speaking on BBC One’s Andrew Marr Show, Mr Clegg said the number of aspiring buyers asking their parents for assistance in property buying has doubled, but the pension industry is concerned about what impact this new scheme may have on retirement planning.
Joanne Segars, chief executive of the National Association of Pension Funds, said: “The government has already looked at letting people have early access to their pensions and decided it against it. People need to keep their pension for their retirement, especially with rising longevity and the costs of long-term care.”