Open Today: 9am - 6pm

04 Jun, 2019/ by Homeward Legal /First Time Buyer

A government minister has suggested young people could use their future pension funds to top up their deposit for a first home.

James Brokenshire, the Housing and Communities Secretary, was speaking at the think-tank the Policy Exchange on Monday.

He said his was a personal idea for a "new deal with the British people".

Mr Brokenshire told attendees at the think-tank meeting: "The average 35-44-year-old has a pension wealth of approximately £35,000.

"If a couple could combine their pension wealth, both potentially using a proportion to support a deposit, this would make a huge difference to millions of lives.

"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."

However, the MP's proposal has been dismissed by officials at the Department for Work and Pensions (DWP), who wrote to the Prime Minister to say the idea carried risks and had not been cleared by their officials.

According to the Guardian, a source said: "We cannot support this policy because the evidence shows it will be risky and does not help the people it intends to help."

Mr Brokenshire's spokesman said the idea was about giving people greater choice over their own money.

According to the most recent house price index from Nationwide, more first-time buyers than ever are turning to friends and family to find the finance for a deposit on their first home.

Its April report stated: "In recent years a growing proportion of first-time buyers have been drawing on help from friends and family or an inheritance to help raise a deposit.

"In 2017/18, almost half of first-time buyers had some help raising a deposit, either in the form of a gift or loan from family or a friend or through inheritance, up from around a quarter in the mid-1990s and 35 percent of buyers in 2015/16."

Share this news post:

More from this category