The ability to unlock cash from pensions could deliver a boost to the housing market and see more parents choose to help their children up on to the first rung of the property ladder, says KPMG.
Stephen Barter, Chairman of KPMG’s Real Estate Advisory practice, said: “Unlocking pensions will enable more parents to lend a helping hand to their children as they look to buy their first home. The trend of giving the next generation, who are struggling with the affordability of housing, a leg up is already established: Shelter’s research shows that parents already lend and gift £2bn each year to help their children get on the property ladder.
“It could also fuel the buy to let market, with people liberating their nest egg to invest in property and benefit from the rental income this would bring to them throughout their retirement.
“Those who use some of their pension pot in this way clearly need to be mindful of the tax consequences for them, and satisfied that this is a sensible use of their savings. But it will undoubtedly offer much-needed support, though adding further fuel to demand and price pressure at the more affordable end of the housing market.”
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.