80 per cent of advisers disagree with the suggestion first-time buyers should be able to use pension toward buying a home
An instant backlash followed last week’s suggestion from housing and communities secretary James Brokenshire that people should be able to take money from their pension funds and contribute it to a house deposit.
Department for Work and Pensions officials distanced themselves from the policy proposal by writing to Downing Street to say they had not approved the idea.
According to a Money Marketing poll, advisers are overwhelmingly against such a policy with 80 per cent of the 140 respondents saying they believed first-time buyers should not have access to their pension for a house purchase, and 13 per cent saying they should.
In a speech last Monday Brokenshire said: “We should be changing the necessary regulations to allow this to happen, protecting the integrity of pension investments but allowing lenders to innovate and design new products to bring this opportunity to consumers.
“It seems rather obtuse that we would deny people the opportunity to do this, given that we know those who own their own home by retirement are on average wealthier and do not have the burden of the largest expense in retirement – accommodation. And it is, after all, their money.”
On Twitter the policy did not look too popular either.
Completely get Brokenshire’s idea but having worked on pensions policy, young people need every penny they can save to stay in those pots. Money for a house needs to come elsewhere. Maybe our interest payments from tuition fees can go towards a home instead…
Let's not encourage young people to use their pensions to buy homes. It will inflate capital available further stoking house prices as help to buy has. Cashing in pensions will just lead to haves and haves not later in life with worsened consequences.
— Sean Tofts (@SeanTofts) June 4, 2019