You are here: Home - Mortgages -

Lib Dems mortgage scheme ‘half baked’

Written by:
Nick Clegg’s idea that pension savings should be used as a form of guarantee to help young people get on the housing ladder is ‘half baked’, Saga’s Ros Altmann has said.
Lib Dems mortgage scheme ‘half baked’

The Liberal Democrats are to propose a scheme whereby parents could use a portion of their pension savings to help their children get on the property ladder.

Under the plans, which are set to be unveiled this week at the party’s annual conference in Brighton, a future lump sum pension payout would be used to guarantee the mortgage.

The party says the extra security could result in making homes more attainable, as it could mean young people having to save up for a smaller deposit.

Clegg told BBC One’s Andrew Marr Show: “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.

“We are going to allow those parents and grandparents to act as a guarantee, if you like, so their youngsters… can take out a deposit and buy a home. It is a pension-from-property scheme.”

But Saga’s Ros Altman said it would be better to introduce incentives for young people to save themselves – such as allowing cash ISAs up to the full annual tax allowance.

She added the Liberal Democrats current plan needed much more detail.

She said: “Most people don’t have enough in their pension fund anyway – and what if they have more than one child? Of course, most people simply don’t have enough money in their pension fund to make this a viable proposition.

“The average defined contribution pension fund is worth around £30,000, which delivers very little pension income in retirement anyway.”

Altmann called for “joined up thinking” on savings from the coalition and argued against mixing housing and pension policy.


Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Insurance Experts: Are you fully insured? Click here to get a quote.

For a free quote or to speak with an insurance expert call 0800 1218744

The 20+ savings accounts that beat inflation

Inflation unexpectedly remaining flat in June was good news for savers who had been expecting the rate to rise...

Why you shouldn’t buy travel currency in the UK with your credit card

If you’re heading abroad this summer, exchanging money in the UK ahead of your travels is a sensible idea. But...

Online pension dashboard could be scrapped

Plans to introduce an online hub which would allow savers to view all their pension savings, including their s...

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week. Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Monday newspaper round-up:BAE, Spending cuts, ESM

BAE protects 'special relationship' with the Pentagon; Lib Dems oppose more fiscal pain; funds for European Stability could go to...