Don’t raid your pension to get on the property ladder
interactive investor responds to a suggestion that first-time buyers use pension savings for a deposit.
13th October 2020 11:33
by Myron Jobson from interactive investor
interactive investor responds to a suggestion that first-time buyers use pension savings for a deposit.
“You can't pay your bills with bricks and mortar” – interactive investor comments on the idea that pensions can be used to pay for first homes.
Commenting on the suggestion from the pensions minister that a portion of pension savings might be used to fund a first-time buyer deposit, Becky O’Connor, head of pensions and savings at interactive investor, says: “Pension savings should be sacrosanct – they are deliberately different to any other kind of savings that can be used for other purposes.
“If young people start dipping into their pensions for reasons other than retirement, their chances of ever giving up work are diminished. While that might sound like a reasonable sacrifice to those desperate to get on the ladder now, it will certainly be less appealing when they reach age 68 and face poverty in retirement.
“You can’t buy your groceries or pay the bills with bricks and mortar.
“There are other ways of addressing the unaffordability of housing without raiding pensions. A generation of poor retired people would not be a good legacy and merely turns the housing crisis into a worse retirement crisis than workers already face.”
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