Clegg raids bank of mum and dad with 'pensions-for-property'
Lib Dem leader wants to let first-time buyers tap their parents' savings for a deposit
DEPUTY Prime Minister Nick Clegg has unveiled a "pensions-for-property" scheme that would allow first-time buyers to tap into their parents retirement funds for deposits to get onto the property ladder.
"We are going to allow parents and grandparents to act as a guarantee if you like so their youngsters... can take out a deposit and buy a home," he said.
Clegg reiterated his support for more taxation of the wealthy, reports The Daily Mail. "I believe in a mansion tax. There's an increasing number of Conservatives who understand the merits."
Clegg's pensions-for-property scheme is likely to be met with criticism from those who feel British homes remain heavily overvalued. At the height of the housing boom, guarantor mortgages allowed first-time buyers to secure mortgages larger than they otherwise would have been able to. But if they failed to meet repayments, the guarantor - typically a parent - was responsible for doing so.
"Pensions are designed to mature into a decent retirement income, not for other purposes," Otto Thoresen, director general of the Association of British Insurers, told The Independent. "Any scheme which uses pensions as a guarantee must ensure that it does not inadvertently make the saver worse off when they retire."
National Association of Pension Funds chief executive Joanne Segars added: "At first glance this idea leaves us feeling slightly uneasy. A pension can only be spent once and this policy could end up leaving retirees out of pocket. The UK already has a serious problem with people saving too little for their old age."
In another measure designed to please Lib Dem activists, Treasury Chief Secretary Danny Alexander revealed that a crackdown on tax dodgers was being extended to people with houses and assets worth over a million pounds. Scores more staff are being recruited to HM Revenue & Customs' "affluent unit" to make sure the wealthy pay their dues.
"It is targeted very much at those people whose affairs are risky," Alexander told the BBC. "If your net worth is more than £1 million you will be within the population that the affluent unit is able to look at. But of course HMRC have a lot of information, they can identify particular groups, particular individuals where there are particular tax risks, for example, those with properties overseas."