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Minister suggests pensions to be used for FTBer house deposit.


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As we have always said on this forum, the "Powers That Be" will stop at nothing to try and keep this ponzi going!

from twitter....

Josephine Cumbo
@JosephineCumbo

The UK's pensions minister is exploring ways for #pensions to be used for house deposits.

Guy Opperman said in a few years, many young savers in the UK will have more than £10,000 in their pensions, thanks to automatic enrolment, but not necessarily enough money for a deposit...
...
Mr Opperman is looking at ways the UK's workplace pension system can be extended to allow young workers to dip into their pensions for home deposits.  This might include lending money from their pension to get onto the property ladder.

Currently, in the UK people cannot access defined contribution pension pots before the age of 55 without incurring steep tax penalities. In the UK, savers cannot currently borrow money from their pensions, as they can in the USA, for example, with 401K retirement accounts.
Speaking at the
@prospect_uk
webinar today, Mr Opperman stressed opening up pensions for house deposits was not government policy, nor was it being examined by officials. However, he invited ppl to come to him with ideas about how pensions could be used to help first-time buyers

 

Maybe we at HPC should suggest to Mr Opperman that pensions should NOT be used to inflate the housing market for FTB'ers at all!

 

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As we have always said on this forum, the "Powers That Be" will stop at nothing to try and keep this ponzi going!


from twitter....

Josephine Cumbo
@JosephineCumbo

The UK's pensions minister is exploring ways for #pensions to be used for house deposits.

Guy Opperman said in a few years, many young savers in the UK will have more than £10,000 in their pensions, thanks to automatic enrolment, but not necessarily enough money for a deposit...
...
Mr Opperman is looking at ways the UK's workplace pension system can be extended to allow young workers to dip into their pensions for home deposits.  This might include lending money from their pension to get onto the property ladder.

Currently, in the UK people cannot access defined contribution pension pots before the age of 55 without incurring steep tax penalities. In the UK, savers cannot currently borrow money from their pensions, as they can in the USA, for example, with 401K retirement accounts.
Speaking at the
@prospect_uk
webinar today, Mr Opperman stressed opening up pensions for house deposits was not government policy, nor was it being examined by officials. However, he invited ppl to come to him with ideas about how pensions could be used to help first-time buyers

 

Maybe we at HPC should suggest to Mr Opperman that pensions should NOT be used to inflate the housing market for FTB'ers at all!

 

This is a truly evil suggestion from the government.

Firstly, if you allow a young person to use their pension to buy a house, all that will serve to do is to increase house prices in line with whatever they are taking from their pension. It is basically a transfer of wealth from the the young persons retirement savings to the large vested property interests in this country.

What's worst again is that by taking the young persons early pension contributions, you might as well be putting a bomb under their long time retirement plans. Anyone in the pension business will tell you that the early contributions are vital in retirement, as this money has the longest time to compound.

The Tories really are the fat sow that devours its young.

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This is a truly evil suggestion from the government.

Firstly, if you allow a young person to use their pension to buy a house, all that will serve to do is to increase house prices in line with whatever they are taking from their pension. It is basically a transfer of wealth from the the young persons retirement savings to the large vested property interests in this country.

What's worst again is that by taking the young persons early pension contributions, you might as well be putting a bomb under their long time retirement plans. Anyone in the pension business will tell you that the early contributions are vital in retirement, as this money has the longest time to compound.

The Tories really are the fat sow that devours its young.

Agreed. That's why the treasury turned down an earlier suggestion to do the same. 

I have a feeling that Boris' point at persuading the broader financial industry has garnered no interest and other people are trying to add bells and whistles to make it work.

 

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I thought they already were.

Aren't pensions forced to hold a certain percentage of UK government bonds ?

 

The compulsory work place pensions that exist are defined contribution schemes without a minimum requirement to be in gilts etc. I suspect you're thinking about defined benefit schemes??

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Aren't pensions forced to hold a certain percentage of UK government bonds ?

No.

 

The compulsory work place pensions that exist are defined contribution schemes without a minimum requirement to be in gilts etc. I suspect you're thinking about defined benefit schemes??

Agreed - but even then, DB schemes aren't FORCED to hold them, they choose to, because they are very good matching assets for pension liabilities.

Pretty much the only restriction on DB scheme investment is that they can't hold more than 5% of the fund in shares of the sponsoring company (so the BP Pension Scheme must have no more than 5% in BP shares). 

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This might include lending money from their pension to get onto the property ladder.

Lending money from your own pension? How's that going to work. Will you owe yourself money?

IIRC Jenrick was floating a figure of allowing ~£50K withdraw from pensions. Opperman mentions £10K above. I actually think granting some access to FTB pensions is inevitable to pick up from the HTB ISA given the LISA is not as common and only offered by a few providers.

Depending on how much access they grant will determine how much of a prop this will be. If they allow £50K or more it's game over for a crash IMO. Also IIRC Amber Rudd was the main voice of objection before, and she's gone now.  

Edited by sammersmith
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dont want to muddy the waters between pension savings and houses that way madness lies and its not actually that great for vested interests.

it would be a great way to get rid of state pension, as soon housing wealth would be seen as normal liquid wealth.

 

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. Also IIRC Amber Rudd was the main voice of objection before, and she's gone now.  

Rudd was the pensions minster at the time. Opperman is the current pensions minister and it is his suggestion. That's a bit worrying.

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I'm trying to look for positives in this but I keep thinking would taking out your pension money actually help you with a deposit? Given the low wages people are on, I can't see it helping much unless you're already on a decent salary in which case you shouldn't need to access your pension pot.

This really is a bad idea, I would be surprised if it ever got through but strangers things have happened. 

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I'm trying to look for positives in this but I keep thinking would taking out your pension money actually help you with a deposit? Given the low wages people are on, I can't see it helping much unless you're already on a decent salary in which case you shouldn't need to access your pension pot.

This really is a bad idea, I would be surprised if it ever got through but strangers things have happened. 

It would store up serious problems for the future, I would be shocked if it got through.

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Why not force people to save for a big deposit with an auto-enrolement scheme 

Not allowed to spend it on anything other than buying a house 

any that’s left after people die after not being able to buy a house gets pooled together to gift those who do buy a buying bonus 

 

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The Tories really are the fat sow that devours its young.

A good description of the Tories.

20 years ago, who would of thought most students would be having to leave a 3 year Uni course with 50k of debt! (and that's in additon to how house prices have outpriced the young). 

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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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