NFU Mutual has said that people struggling to get on the property ladder could benefit from a ‘Help to Buy Pension’.
The insurer has 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, one in six said they would be inclined to use it as a deposit on a house. This increases to a third when talking to 18-24 year olds.
The idea is already proving popular among first time buyers in Canada who can borrow limited amounts from their pension to help them get on the property ladder. Research from the insurer shows that early access to some of their retirement savings would encourage more to start saving into pensions.
Sean McCann, chartered financial planner at NFU Mutual, said: “We’ve already had Help to Buy mortgages and Help to Buy ISAs – 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 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.”
