Public opinion is sharply divided over whether people should be allowed to dip into auto-enrolment pension pots to help buy their first home, according to new research by Nest Insight.
The study found that 38 per cent of those surveyed thought using pension savings for a property deposit was a “very” or “fairly good idea”, while a third (33 per cent) disagreed.
Despite this split, there was widespread agreement that more needs to be done to help first-time buyers — particularly those on low to moderate incomes — overcome the challenge of saving for a deposit amid rising rents and high property prices.
Nest Insight said many people recognised the “pressing need” to support aspiring homeowners and saw auto-enrolment pension pots as an “unparalleled opportunity” to make saving for a deposit more achievable.
However, the research found equal concern that such a move could simply shift the problem by replacing a housing crisis with a pensions one. The initiative was described by one responded int he research as “robbing Peter to pay Paul”.
Support for the idea was strongest among those who were most likely to benefit from the policy, while opposition was highest among homeowners, older people and those with higher incomes. More than half of these groups said it was not a good idea, compared with just 20% of younger renters.
Nest said this divergence reflects generational differences in how people access home ownership, as well as the changing importance of pension savings at different life stages.
Even among supporters, enthusiasm was more limited. Few saw it as a “very good” idea, with most describing it as only “fairly good”. Around half of non-homeowners said such a policy could help them — but one in five renters doubted they would ever have enough pension savings to make it work. Higher-income renters were much more positive than those on lower incomes.
By contrast, opposition among critics was far stronger. Half of those who disliked the proposal said it was “not a good idea at all”.
Both supporters and opponents shared concerns about the long-term impact on pension adequacy. Overall, 65 per cent of survey participants — including 60 per cent of private renters — said they were worried the policy could leave them with less income in retirement. At the same time many younger
respondents also voiced fears that the state pension might not be available to them in later life.
Anna Brain, research lead at Nest Insight, said: “Broadly speaking, people liked the idea that more is being done to help first-time buyers get on the housing ladder. But there was scepticism — and even some cynicism — over whether pensions are the right answer.
This means that the benefits of the idea will need to be clearly articulated against the risks and the alternatives if it’s something that policymakers choose to take forward.”
Brain added that the findings raise wider questions about which groups might benefit most if such a policy were introduced, what support they would need, and whether they would ultimately be better off in retirement.
Nest Insight plans to explore these issues further in a final report due early next year.
