First-time homebuyers should be allowed to access their pension savings to help them get on to the property ladder, Housing Minister, James Brokenshire has suggested.

Speaking at the Policy Exchange, 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.”

He stated that the change would give people “real choice, real opportunity”, and said that the change could make a “huge difference to millions of lives”.

“For many, a mortgage would be cheaper,” he added.

However, this sentiment was not echoed by some in the pensions industry.

The People’s Pension director and policy and former Shadow Pensions Minister, Gregg McClymont, said that the answer to the housing crisis was “building more affordable housing, not diminishing people’s pensions”.

He continued: “Introducing a policy of robbing Peter to pay Paul will not make housing any more affordable. Instead it’s likely to push up house prices and leave younger people worse off in the future.

“Pensions are about providing much-needed incomes for people in retirement, and all the international evidence points in one direction; pension pots accessed for housing or other reasons during a working life are never adequately replenished ensuring people will be left worse off.”

Aegon pensions director, Steven Cameron, concurred: “There’s a huge risk that offering early access to pensions to pay house deposits will be a far too tempting ‘bird in the hand’ offer.

“Those in a hurry to get on the housing ladder could face long term regrets in retirement as money built up at younger ages in pensions are particularly valuable as they have far longer to benefit from investment growth.

“Another way of looking at housing and retirement policies together would be to waive stamp duty on retirees who want to downsize. This would free up family homes for younger generations, tackling the supply side issues.”

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