Plans for the much discussed 'pensions for mortgages' scheme could be in place by Easter, according to pensions minister Steve Webb.

Webb made the comments after deputy prime minister Nick Clegg revealed that the government would consider allowing parents and grandparents to use the value of their pensions to help their children buy houses, exposing himself and the Lib Dems to a wave of criticism from the industry, with many saying the plans were not even feasible without major law changes.

However, speaking to the Financial Times, Webb insisted the idea was workable and could be in place by April. The idea, he said, was not about early access, something this parliament had rejected before, and said mortgage lenders would be interested in providing loans to people who are not far from their pension age.

"This is about an individual who is going to draw a pension at a date in the future," Webb told the FT, "entering into an agreement about the part of the pension which would have been a lump sum, being made over to a mortgage lender.

"Our initial legal assessment is that this does not require any statute changes...?but it might involve a conversation with regulators."

Earlier this week, Clegg's ideas were dismissed by Saga director-general Ros Altmann as "half-baked", and Jonathan Hazlett, head of pensions law at Osborne Clarke, called the plan "unworkable". He added that the government would need to make significant and far reaching changes to pensions law in order to make this scheme work. Those changes, he said, would undermine the basic principles on which our pensions system is built.

First published 26.09.2012
azeevalkink@wilmington.co.uk