Clegg property plan robs Peter to pay Paul, Hornbuckle says
The devil is in the detail for a new property scheme proposed by Nick Clegg, Hornbuckle Mitchell has said.
Stewart Dick, head of sales at the SIPP and SSAS provider, said the proposals might be a case of “robbing Peter to pay Paul”.
The deputy prime minister said parents and grandparents could use their pension pots as a guarantee to help children and grandchildren buy their first property.
However, Dick said he was unsure precisely how this would work.
“At first you think this sounds like a really good idea but I am not sure it works,” he said. “If it means people can see an additional use for their pension and that encourages them to save into a pension, that’s a good thing. If you can boost the housing market at the same time, it’s a win-win situation. But at a practical level, how does it work?”
Dick said he was concerned pension income could be threatened because of funds being committed to a particular property. “Has the bank got a charge on the house?” he said. “Can one pot of money do two things at the same time?”
The scheme would be suitable only for those with a sizeable pension pot nearing retirement, Dick said. More detail needs to be provided by the Liberal Democrats as to how this would work, he added, as the proposals currently raise more questions than answers.