logo
The countries that let savers access their pension early – even for a house deposit

The countries that let savers access their pension early – even for a house deposit

Telegraph5 days ago
Do you have a substantial pension pot but can't afford to get on the property ladder? Or have you retired on a good pension but are unable to buy a house? Email us at money@telegraph.co.uk.
When George Osborne entered the House of Commons to deliver his 2014 Budget, few predicted the seismic changes coming for pensions.
Just minutes later, the then chancellor would strip back decades of restrictions and finally allow savers to access their retirement savings early.
While he transformed how pensions could be accessed, strict limits remained. To this day, unless someone is in serious ill health or worked in a very limited set of professions, they cannot touch their nest egg until age 55 – rising to 57 in 2028.
Critics say the rules are trapping workers into decades of renting in retirement because despite building up healthy pots, many still cannot afford to buy a home.
A study by Scottish Widows found a quarter of workers will be renting or paying a mortgage into retirement, with an annual cost of £10,600 – enough to almost obliterate a full state pension.
It is against this backdrop that calls are growing for further radical changes, including allowing people to raid their pension for a house deposit – something that the Government, midway through its major pensions review, continues to rule out.
Countries on at least five different continents have allowed people to access their pension early already, according to a report co-authored by investment managers Schroders and the Pensions Management Institute.
Here are some of the reasons why – and whether they should come to Britain.
Buying a home
Savers in Singapore have been able to withdraw cash from their pension and put it towards buying a home since 1968. As a result, home ownership has surged from 58pc in 1980 to more than 90pc now.
There are rules on the type of property and how much a prospective homeowner can take out, but anyone meeting the criteria can take advantage.
Similar opportunities are available in countries like Australia, New Zealand and the United States.
Sir Steve Webb, the former pensions minister, said that by 2045, a million more pension households could be living in rented accommodation.
He said: 'Having to fund rent out of an often meagre pension pot is pretty catastrophic for your standard of living in retirement. If we can use the growing pension pot sooner for the specific reason of helping people to buy a house, then this has to be worth looking at.
'I accept that there are risks here, not least that you end up with an even more inadequate pension pot at the end, but that's not as bad as having to fund rent.
'This isn't a panacea, as many people have too little in their pension pot at a relatively young age to be able to make a meaningful contribution towards a deposit, but it will help some – perhaps especially outside the high house price areas of the country.'
Taking a home loan
In South Africa, pension savers can use their pension pot as collateral for a home loan. This applies across their entire pot, but a cap applies – beginning at 60pc of the first R200,000 (£8,350) and falling as more is borrowed.
However, if they fall behind on the repayments, their pension can be used for the repayments – bringing tax implications alongside a threat to their retirement.
Paying off mortgage arrears
In the event of serious mortgage arrears, some countries allow savers to access their pot early. In New Zealand for example, members can withdraw their own contributions, although not those made by the Government. The amount is capped at 13 weeks of living expenses.
Homeowners in Australia and the US can also withdraw some of their pension to avoid the forced sale or repossession of their property.
Covering medical expenses
Some countries do not offer free universal healthcare, but allow access to pension savings in order to meet the cost.
In the US, members can take a penalty-free hardship withdrawal to cover medical expenses for them or a family member are allowed – although they are also taxable. They can also take out funds for funeral costs, tuition fees and other educational expenses.
In Singapore, $1.3bn dollars (£750m) was taken out for medical expenses and long-term care in the first three months of 2025.
For its part, successive UK governments have already shown they are not averse to borrowing ideas from abroad. The hugely successful auto-enrolment, through which people are signed up to a pension until they opt out, was inspired by the world's first such system in New Zealand.
The Labour Government is also midway through a major two-part pension review and lessons have not only been learnt from other countries, they're already on the verge of being implemented.
The upcoming Pension Schemes Bill will merge all 86 Local Government Pension Scheme pots into six 'megafunds' –similar to the Canadian and Australian systems. A new form of pension saving popular in the Netherlands, known as collective defined contribution schemes, is also on the way.
James Brokenshire, then housing minister, first mooted the idea of using pension funds to buy a home back in 2019. As recently as March this year, it was echoed by Nikhil Rathi, the Financial Conduct Authority's chief.
However, the regulator said it had no official plans to explore the idea and the Government has indicated it will not be included in the next round of major pension reforms, which will be published on Monday.
Major changes are still expected however, including steps to increase the amount people are saving and increase employer contributions to their workers' retirements as ministers look to tackle poverty in later life.
Experts also believe that the affordability of the state pension will come under the microscope.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

US president Donald Trump arrives in Scotland for four-day visit
US president Donald Trump arrives in Scotland for four-day visit

BBC News

time10 minutes ago

  • BBC News

US president Donald Trump arrives in Scotland for four-day visit

US president Donald Trump said "it's great to be in Scotland" as he landed for a four-day private Air Force One touched down at Prestwick Airport, just before 20:30, the US president was met by Scottish Secretary Ian Murray and Warren Stephens, US Ambassador to the spoke to journalists before the presidential motorcade left for his Turnberry resort, in South Ayrshire, where he is expected to play golf on about Sir Keir Starmer, who he is due to meet on Monday, he said: "I like your prime minister. He's slightly more liberal than I am - as you probably heard - but he's a good man. He got a trade deal done." Trump added: "You know, they've been working on this deal for 12 years, he got it done - that's a good deal, it's a good deal for the UK."The president earlier also described Scotland's First Minister John Swinney as "a good man" and said he was looking forward to meeting has pledged to "essentially speak out for Scotland". The motorcade - which contained more than two dozen vehicles - entered Trump's Turnberry golf resort at about 21:30, flanked by Police Scotland vehicles and ambulance he arrived at the resort, the president's vehicle - known as The Beast - passed a small group of will stay at Turnberry over the weekend before heading to his second property in Aberdeenshire, where he will open a new 18-hole course at Menie."Sean Connery helped get me the permits - if it weren't for Sean Connery we wouldn't have those great courses," he said, referring to the Scottish actor he said helped him get planning permission for the courses. Trump is expected to meet Starmer and Swinney on Monday while European Commission President Ursula von der Leyen confirmed on X that she will meet the president on Sunday to discuss transatlantic trade will travel back to the US on Tuesday and is due to return to the UK for an official state visit in September.A number of protests are expected to be held to coincide with the visit, including demonstrations in Edinburgh and Aberdeen on Saturday. A major security operation has been under way in South Ayrshire and Aberdeenshire this week, ahead of the president's of officers have also been drafted in to support Police Scotland, under mutual aid arrangements, from other UK closures and diversions have been put in place in Turnberry, while a security checkpoint outside the resort and a large fence has been erected around the course.A number of police vans have also been seen at the Menie site. Speaking to journalists at Prestwick, Trump said European countries need to "get your act together" on migration, and "stop the windmills", referring to wind said: "I say two things to Europe: Stop the windmills. You're ruining your countries. I really mean it, it's so sad."You fly over and you see these windmills all over the place, ruining your beautiful fields and valleys and killing your birds, and if they're stuck in the ocean, ruining your oceans."Stop the windmills, and also, I mean, there's a couple of things I could say, but on immigration, you'd better get your act together or you're not going to have Europe anymore."In 2019, his company Trump International lost a long-running court battle to stop a major wind power development being built in the North Sea off Aberdeen. Trump argued that the project, which included 11 wind turbines, would spoil the view from his golf course at Menie. Trump also claimed that illegal migration was an "invasion" which was "killing Europe".He said: "Last month, we (the United States) had nobody entering our country. Nobody. Shut it down. And we took out a lot of bad people that got there with (former US president Joe) Biden."Biden was a total stiff, and what he allowed to happen.... but you're allowing it to happen to your countries, and you've got to stop this horrible invasion that's happening to Europe; many countries in Europe."Some people, some leaders, have not let it happen, and they're not getting the proper credit they should."I could name them to you right now, but I'm not going to embarrass the other ones."But stop: this immigration is killing Europe." Quizzed on the latest developments with the Epstein files and Ghislaine Maxwell's interview with the Department of Justice, Trump said he had "really nothing to say about it"."A lot of people are asking me about pardons obviously - this is no time to be talking about pardons."He said the media was "making a very big thing out of something that's not a big thing".Earlier, Chancellor Rachel Reeves told reporters the US president's visit to Scotland was in the "national interest".Speaking during a visit to the Rolls-Royce factory, near Glasgow Airport, she said: "The work that our Prime Minister Keir Starmer has done in building that relationship with President Trump has meant that we were the first country in the world to secure a trade deal."Reeves added that it had a "tangible benefit" for people in Scotland, from the Scotch whisky industry to the defence sector."Swinney said his meeting with Trump would present an opportunity to "essentially speak out for Scotland" on issues such as trade and the increase of business from the United States in first minister said he would also raise "significant international issues" including "the awfulness of the situation in Gaza".And he urged those set to protest against the president's visit to do so "peacefully and to do so within the law". Visits to Scotland by sitting US presidents are Elizabeth hosted Dwight D Eisenhower at Balmoral in Aberdeenshire in 1957. George W Bush travelled to Gleneagles in Perthshire for a G8 summit in 2005 and Joe Biden attended a climate conference in Glasgow in only other serving president to visit this century is Trump himself in 2018 when he was met by protesters including one flying a paraglider low over Turnberry, breaching the air exclusion zone around the returned in 2023, two-and-a-half years after he was defeated by Biden. Trump does have a genuine link to Gaelic-speaking mother, Mary Anne MacLeod, was born in 1912 on the island of Lewis in Scotland's Outer Hebrides and left during the Great Depression for New York where she married property developer Fred son's return to Scotland for four days this summer comes ahead of an official state visit from 17-19 September when the president and First Lady Melania Trump will be hosted by King Charles at Windsor Castle in Berkshire.

Alexander Isak offered whopping £32M-A-YEAR deal from Saudi but star has heart set on record-breaking Liverpool transfer
Alexander Isak offered whopping £32M-A-YEAR deal from Saudi but star has heart set on record-breaking Liverpool transfer

The Sun

time10 minutes ago

  • The Sun

Alexander Isak offered whopping £32M-A-YEAR deal from Saudi but star has heart set on record-breaking Liverpool transfer

ALEXANDER ISAK has been offered a £32million-a-year deal from Saudi Arabia — but his heart is set on Liverpool. The Swedish striker, 25, told Newcastle he wants to leave after they knocked back the Reds' initial approach over a potential British-record £120m move last week. SunSport understands he could now submit a transfer request to push for a switch to the Premier League champions. And he wants to head to Anfield despite the extraordinary offer from Al-Hilal, which would also see him land a £14m signing-on bonus and a host of other incentives. Isak would pocket £3.6m for winning the Saudi Pro League, £3.8m for lifting the Asian Champions League and a further £1.75m for finishing as the division's top scorer. Also on offer is £120,000 a month in personal expenses to cover travel for him and his family, a club house with four full-time staff and a full-time chauffeur. Isak would be provided with a private jet for him and his family whenever he is called up for Sweden duty. It would make him the fifth-highest earner behind only Sadio Mane, Karim Benzema, Riyad Mahrez and Cristiano Ronaldo. But Isak only has eyes for Liverpool. The Toon are refusing to sell last season's 27-goal top scorer despite him not going on their pre-season tour to Asia. They have been unable to persuade him to sign a £300,000-a-week deal making him Newcastle's highest-ever earner. And they fear he could force a move by handing in a written transfer request. Newcastle are exploring a move for RB Leipzig striker Benjamin Sesko as a potential replacement. Newcastle plotting Benjamin Sesko bid to replace Alexander Isak And they are planning a £35m bid for Brentford's Yoane Wissa after a £25m offer was rejected. New Liverpool forward Hugo Ekitike, who snubbed Tyneside for the Reds, has dropped a big hint that Isak could be joining him at Anfield. The Frenchman cost £69m from Frankfurt and boss Arne Slot wants Isak to join him, Mo Salah and Florian Wirtz in a new-look attack. And Ekitike, 23, revealed how much he likes a strike partner. He said: 'I can play alone and also with another striker and that's what makes me versatile. "You know now in football you need to adapt." 2

Get your act together on immigration, Trump tells Europe as he lands in Scotland
Get your act together on immigration, Trump tells Europe as he lands in Scotland

Rhyl Journal

time14 minutes ago

  • Rhyl Journal

Get your act together on immigration, Trump tells Europe as he lands in Scotland

Mr Trump is in the country for a four-day visit to both of his golf clubs in Aberdeen and Ayrshire. Landing at around 8.30pm on Friday, the president was greeted by Scottish Secretary Ian Murray before speaking to reporters. Asked about illegal immigration – which successive UK governments have sought to curb – Mr Trump said: 'On immigration, you better get your act together. 'You're not going to have Europe anymore, you've got to get your act together. 'As you know, last month we had nobody entering our country – nobody, (we) shut it down.' He added: 'You've got to stop this horrible invasion that's happening to Europe.' Immigration, Mr Trump said, was 'killing Europe'. Some European leaders, he continued, 'have not let it happen' and are 'not getting the proper credit they should', though the president did not say who he was talking about. Mr Trump said: 'Many countries in Europe, some people, some leaders, have not let it happen, and they're not getting the proper credit they should.' The president also praised Sir Keir Starmer ahead of a meeting between the two at one of his courses in the coming days, describing him as a 'good man'. 'I like your Prime Minister, he's slightly more liberal than I am – as you probably heard – but he's a good man. He got a trade deal done,' he said. 'You know, they've been working on this deal for 12 years, he got it done – that's a good deal, it's a good deal for the UK.' The president's motorcade – which contained more than two dozen vehicles – passed a small group of protesters as he entered his Turnberry golf club. Mr Trump also suggested he would be meeting Sir Keir 'tomorrow evening', although it is understood the pair will not meet until Monday. As well as the Prime Minister, Scottish First Minister John Swinney will meet with the president, as will European Commission president Ursula von der Leyen, who confirmed on X she will come to Scotland on Sunday in a bid to hash out a trade deal between the US and Europe. Mr Trump told journalists there was a 'good 50/50 chance' of a deal being struck, adding that it would be the 'biggest deal of them all'. The president and Sir Keir are expected to discuss potential changes to the UK-US trade deal which came into force last month. Mr Swinney has pledged to 'essentially speak out for Scotland'. Speaking as he boarded Air Force One in the US, Mr Trump said he would be having dinner with the Prime Minister at Turnberry, before 'going to the oil capital of Europe, which is Aberdeen'. He said: 'We're going to have a good time. I think the Prime Minister and I get along very well.' Mr Trump added: 'We're going to be talking about the trade deal that we made and maybe even approve it.' He also told journalists he was 'looking forward' to meeting with the 'Scottish leader' Mr Swinney, describing him as a 'good man'. During his time in Scotland, the president is also likely to spark a number of protests, with concerns being raised about how such demonstrations are policed. Police Scotland has called in support from other forces in the UK to help bolster officer numbers, though senior officers and the organisation which represents the rank-and-file have accepted Mr Trump's visit will have an impact.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store