Terry Smith attacks plan to use pensions to secure mortgages

ING

ING City fund manager Terry Smith yesterday called Nick Clegg “brain dead” after the Deputy Prime Minister announced plans to allow children to guarantee mortgage deposits using their parents’ pension pots.

The multimillionaire Tullett Prebon boss criticised the policy, which would enable first-time buyers to secure part of their house loan on a relative’s savings.

“The ‘idea’ of people who mostly already have inadequate pension provision using part of it to give their children a stake in what are almost certainly still over-priced houses in the UK beggars belief,” he said.

“[Politicians] seem not to have figured out that the problem would just be solved if house prices were allowed to decline.”

He pointed that parents are already able to hand the cash lump sum to anyone so any successful scheme would have to include new tax incentives.

The Lib Dems want to implement the policy early in 2013.