Could your pension help your kids get a mortgage?

By Daniel Culpan

According to proposals by Liberal Democrat party leader Nick Clegg, parents in work should be able to use their pension savings to help fund their children's mortgage and get them on the property ladder, The Financial Times reports.

Speaking in Brighton at the Lib Dem conference, Mr Clegg said he wanted to let savers use lump sums from their pensions to guarantee part of a mortgage taken out by their children or grandchildren to buy their first home.

Talking to the BBC's Andrew Marr, the deputy prime minister said: "We've got thousands of young people who are desperate to get their feet on the first rung of the property ladder but deposits have doubled and the number of young people who are asking help from family members to get a mortgage has doubled."

Mr Clegg called the move a "pension for property scheme" and Lib Dem officials said they were in talks with mortgage lenders and pension providers about how the scheme would work - with hopes that the plans could come into effect during this parliament.

It has been estimated that around 250,000 people could be eligible for the scheme and 12,000 are likely to join it. However, Lib Dem advisers have admitted that savers would need around £40,000 in their pension to be eligible - well above the average £26,000 savings pot.

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