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Pension for property scheme revealed

Pension for property scheme revealed

Category: Pensions

Updated: 05/10/2012
First Published: 24/09/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The deputy Prime Minister Nick Clegg has claimed parents should use pension funds to help their children purchase their first home.

Under new plans, to rescue the ailing first-time buyer mortgage market, parents and grandparents will be able to donate up to 25% of their own pension pots to provide extra money for their offspring's deposits.

Speaking at the Liberal Democrat Conference in Brighton, Mr Clegg said that the initiative will provide another way for individuals to help the younger generation onto the property ladder.

"We've got thousands of young people who are desperate to get their feet on the first rung of the property ladder but deposits have doubled and the young people who are asking for help from family members to get a mortgage has doubled.

"The Government is going to do something which hasn't happened before. We are going to work out ways in which parents and grandparents who want to help their children and grandchildren buy a property of their own."

Raising funds for high deposit mortgages is the main hurdle facing thousands of first-time buyers, restricting them from entering the housing market.

Described as "half-baked", the initiative has been panned by pension experts who argue that the sole purpose of having a pension is to provide income during retirement, rather than bailing out cash-strapped relatives.

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