Should we have a ‘Help to Buy’ pension?
Over a third of adults aged 18-34 would invest more in a pension if they could access some of their money early before retirement, according to NFU Mutual.
Younger generations say they’d use the money as part of a mortgage deposit.
Such a scheme – dubbed a ‘Help to Buy pension’ – could help struggling house buyers desperate to get on the property ladder. NFU Mutual found that a quarter of adults would invest more into a pension if they could access a lump sum before they turn 55. Of those who would invest more, 1 in 6 said they would be inclined to use it as a deposit on a house. This increased to a third among to 18-24 year olds.
Sean McCann, chartered financial planner at NFU Mutual, said: “We’ve already had Help to Buy mortgages and Help to Buy ISAs, so a Help to Buy pension isn’t as unlikely as it may sound. Borrowing money from your pension to help people buy their first home is already part of the savings culture in Canada, for exmaple, and our research suggests it could prove popular here too. If the Chancellor is looking to encourage people to save more for their retirement this could be an option.
“At the moment, getting on the property ladder is more of a priority for young people, pension savings may not start in earnest for some until they’re well into their 30s. That may mean they work for much longer or retire with a much lower income than they had hoped.”