Could unlocking pensions help first-time buyers step onto the property ladder?

Posted on

The challenge of saving enough to act as a deposit has been well-documented, and now an Australian party has put forward a proposal – to allow first-time buyers to access some of their pension savings.

Much like in the UK, first-time buyers in Australia are facing several obstacles to buying their first home as property prices rise. The proposal suggests allowing first-time buyers to withdraw up to 40% of their pension savings if they have a 5% house deposit to allow them to buy a home sooner.

The average British first-time buyer takes 8 years to save a deposit

Figures from Barclays highlight the challenge aspiring homeowners are facing.

Most young people start saving for their first property at the age of 24, but the average age of a first-time buyer is 32. As house prices have increased, it’s not surprising that it’s taking longer to save the necessary deposit. In addition, rent and other costs are all rising, which could mean those saving for their first home have less to put away each month.

While the amount first-time buyers require varies significantly across the country, the average deposit paid by a sole first-time buyer in 2021 was £61,100.

Saving a deposit was cited as the biggest obstacle to homeownership by 35% of people.

You will usually need a deposit of at least 5% to purchase a home. With the average first-time buyer’s house costing £281,900, you’d need a minimum deposit of a little more than £14,000.

So, could unlocking pensions for first-time buyers support homeownership goals in the UK?

While formal proposals have not been put forward in the UK, the topic has previously been discussed. And while it could help you reach deposit goals much sooner, there are two key criticisms of the proposal:

  1. Many first-time buyers will not have had long enough to accumulate the pension savings needed to act as a substantial house deposit.
  2. It could have a long-lasting effect on retirement savings and mean people would face an income shortfall in their later years.

If you’re saving to purchase your first home, accessing your pension may not be an option but there are other things you can do to speed up how soon you reach your goal.

3 things that could help you buy a home sooner

1. Save using a Lifetime ISA (LISA)

Savers between the ages of 18 and 40 can open a LISA. It offers an efficient way to save a house deposit.

Each tax year, you can add up to £4,000 to a LISA and your deposits will benefit from a 25% government bonus. So, if you make full use of the LISA allowance, you’d receive an extra £1,000 each year to put towards buying a home. You can choose to save or invest through a LISA.

A LISA can be valuable, but if you make a withdrawal for a purpose other than buying your first home before the age of 60, you would face a 25% penalty.

2. Choose a family mortgage

If your family are in a position to do so, a family mortgage may mean you can purchase a house without a deposit.

A family mortgage involves someone placing the equivalent of a deposit into a savings account. This acts as a security against your mortgage and means you don’t need a deposit. Once a specified term has passed, your family member can withdraw their savings, along with any interest earned.

In the Barclays survey, 56% of first-time buyers said they wouldn’t have been able to get on the property ladder without family support. While gifting deposits has become common, a family mortgage can mean they’re still able to help if this isn’t possible.

3. Use the Help to Buy equity loan scheme

You will still need to save a minimum of 5% deposit to use the Help to Buy equity loan scheme. However, it can mean you’re able to buy a house that may otherwise be out of your budget.

Under the scheme, you can borrow up to 20% of the property’s price from the government, so your mortgage may be lower and more affordable.

There are restrictions when using the Help to Buy scheme, and it’s not right for everyone. The total value of the property must not exceed thresholds, which vary depending on where you’re buying a home, and it must be a new-build property.

You also need to keep in mind that the loan will need to be repaid. You don’t have to repay the equity loan until you sell your home or you’ve owned it for 25 years, whichever is sooner. However, interest will start being added after five years.

It’s also important to note that you borrow a percentage of your home’s value, rather than a fixed amount. So, if the value of your home increases or falls, so will the amount you owe.

If you want to use the Help to Buy scheme, you must reserve your home and apply for the scheme by 31 October 2022 and legally buy the home before 31 March 2023.

When you’re ready to buy your first home, we can help you find a mortgage that’s right for your needs and offer advice. Please contact us to talk about your options.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.


We aim to keep our clients up to date on interesting and relevant financial news.

You can sign-up to receive our monthly newsletter by email, even if you’re not yet a client. Sign-up using the form below.

Client testimonials

I have always found Black Swan to be caring and understanding of my quirky lifestyle. I always feel they try to get me the best returns while respecting my current needs.

Sally Muir

A client since 2011

We would be very happy to recommend the support and service we receive.

Valerie Locks

A client since 2010

I have always been completely useless regarding finance - thankfully our financial adviser is not! I've retired with far more than I ever expected and investments continue to grow safely. So - thank you!

Bernadette Jane Warner

A client since 2000

Very happy with the professional service I have received and feel a lot happier now with my finances put in order.

Martin Field

A client since 2011

Julie Cooper was recommended to me by a work colleague. She has been very helpful, professional and has explained everything well. I would definitely recommend her services to anyone else who are interested in a financial review.

Steven Rooke

A client since 2018

…Service has been first class.

Hugh Fells

A client since 2012

My face to face meetings with Rob Young and Jessica Lyons have always been very open and understandable. My questions have been answered clearly and I have left feeling that my financial matters are in good hands.

Sandra Jack

A client since 2000

[A] safe pair of hands in a complex financial world.

Gary Middlehurst

A client since 2003

A reliable company with good communication skills and good knowledge of the financial markets.

Alan Evetts

A client since 2014

Maureen Pembridge is a long-time trusted advisor to our family. The market might fluctuate but her attention to detail is consistent.

Linda Burnard

A client since 2000

I am pleased to recommend Julie as a trustworthy financial advisor. She explains financial jargon in plain language, and always listens carefully to my particular financial needs and has helped me make the best of my savings.

Carolann Samuels

A client since 2010

I have always been satisfied with the way that Black Swan has handled my account. And I have always found the staff very helpful whenever I need to call the office.

Robert Anthony Matthews

A client since 2012

An excellent personal service from a person I know and trust.

Michael Dalton

A client since 2010

I am getting a very good services from Black Swan, they have got my investments sorted out which was in a bit of a mess.

Roy Jakens

A client since 2012

A good, efficient team providing clear ideas to shape a winning strategy.

Adrian Michael Levenstein

A client since 2011

Black Swan is a company to be trusted, with friendly staff and professional advisors.

David Brian Jennings

A client since 2017

I have been with Black Swan for many years. I have never wished to change anything. They give a good straight forward service.

Martin Barrett Brooks

A client since 2010

Andy Peters has been invaluable in firstly combining several pension pots and then giving excellent investment advice. It has given us a great deal of comfort to know that our financial affairs are in such good hands.

James Guillum Scott

A client since 2014

I find my financial advisor easy to talk to and feel that she understands my lifestyle. She is always available for help when I need her and explains in words that I can understand.

Margaret Ena Glasgow

A client since 2000

Andy is a first rate Director, excellent communicator and leader.

Ross Perry

A client since

Black Swan Financial Planning and Andrew in particular, are very clever at working out how risk averse we are, and coming up with solutions that we feel comfortable with. We are happy in the knowledge that we can continue to enjoy a comfortable retirement. Andrew Peters is a very, very friendly person who is great to chat to and easy to deal with. He explains things very clearly in layman’s terms, and if we still don’t understand, he explains it until we do!

Alan & Jane Dyer

Clients since 2012

We have always found Rob [Young] to be very approachable and knowledgeable. We have every confidence in the advice given and feel comfortable with the decisions we’ve made. There are certain opportunities that we wouldn’t have known about if Rob hadn’t brought them to light, which makes the advice good value for money as far as we’re concerned.

Peter & Pauline O’Halloran

Clients since 2013

Rob [Young] is extremely knowledgeable. I knew nothing about the different types of trusts which will not only secure my income in retirement, but also leave a legacy for my children. I’m glad that I sought his advice when I did.

Sarah Wilson

A client since 2015

I am extremely happy with the service afforded to me by the company and my adviser Julie Cooper.

Geoff Coxell

A client since 2010

My wife and myself have been dealing with Black Swan for a number of years. We have met with different representatives from the company over the years and have found all very helpful in their own way. We met with James [Anderson] a few years ago and found him very helpful and knowledgeable. He keeps in contact with us on a regular basis. We find the Company information very helpful and we feel very secure with our finances.

Andrew Kirchen

A client since 2015

I have always found my adviser to be easy to contact, very professional in his approach, yet friendly and understanding. I have a sense of an experienced company behind him, really on the ball financially and with good standards.

B McBean

A client since 2011

Partner with the most reliable and experienced team of advisers

Enter your details & we'll be in touch to discuss your needs.
Alternatively, contact us directly and speak to a member of the team.

    Subscribe to our newsletter