OPT calls for pensions overhaul

The Occupational Pensions Trust (OPT) has suggested that the pensions system be restructured to help people get on the property ladder.

The trust suggests savings options such as ISAs and pension schemes be streamlined into a single tax-incentivised system. That way, young people would be more likely to put money aside because they could use their savings to buy a home.

Ben Shaw, development director with OPT, told FTAdviser.com: “If they knew from the moment they invested the first pound that they were building up a housing deposit in a tax-efficient, flexible manner they would be much keener to save for the long-term.

“In turn, that would deliver better pension outcomes later in life when growing numbers will have to depend on their main property asset to supplement their income and subsidise care costs, either through downsizing or equity release.”

He pointed out that in practice the pension scheme could retain ownership of the property with the scheme holder effectively paying rent to the scheme.

“We are already seeing more people using their homes to complement their retirement incomes, some by choice but many by necessity,” he said. “Why ignore such a great opportunity when it can be embraced to lay down a strong foundation of pension wealth for future generations?”