Brokenshire rebuked after saying young people should be allowed to dip into pensions to buy homes

A cabinet minister has been rebuked after furious officials complained to Downing Street following a call for young people to be able to use their pension to buy their first home.

Housing Minister James Brokenshire said the next Conservative government should “trust the individual to make the choice for themselves” and allow them to dip into their pension early.

But Sky News understands the Department for Work and Pensions has formally complained to Downing Street about the speech, warning the plan would be “risky” and had not been approved or discussed with ministers or the Secretary of State Amber Rudd.

A source in the department said: “We cannot support this policy because the evidence shows it will be risky and does not help the people it intends to help.

“The housing market doesn’t need people to dip into their pensions to buy more houses”.

In a note to Number 10, officials warned they had previously spoken to the Ministry for Housing, Communities and Local Government, which Mr Brokenshire runs, about the policy and said it does not have support across government because of the risks involved.

Experts in DWP are understood to have expressed significant concerns that the policy encourages people to trade off pension saving at an early age, which could leave them without enough left for retirement.

During the speech at the Policy Exchange, Mr Brokenshire said: “We should be looking at allowing an individual to use part of their pension pot as a deposit on a first-time home purchase.

“We should be changing the necessary regulations to allow this to happen, protecting the integrity of pension investments but allowing lenders to innovate and design new products to bring this opportunity to consumers.

“Auto-enrolment began in 2012, record numbers of people are putting into their pensions.

“It seems rather obtuse that we would deny people the opportunity to do this, given that we know those who own their own home by retirement are on average a) wealthier and b) do not have the burden of the largest expense in retirement – accommodation.

“And it is, after all, their money. Not the fund’s, not the state’s, it’s yours and the next Conservative government should free that capital up, and trust the individual to make the choice for themselves.”

A spokesman for the DWP added: “Automatic enrolment has been a huge success story, with more than 10 million workers now saving for retirement”.

A Number 10 source said Mr Brokenshire was presenting an idea as part of the Conservative leadership race and not a formal policy.

A spokesman for Mr Brokenshire said: “James Brokenshire’s idea is quite simply about economic freedom.

“It is about giving people greater choice over their own money, and no one is forced to take part – people can use their capital in the way they want to.

“The Conservative Party needs to reconnect people to capitalism and this is one of many ideas we should be exploring as the leadership race takes place.”

(c) Sky News 2019: Brokenshire rebuked after saying young people should be allowed to dip into pensions to buy homes