Debate: Should we be worried that some over-55s are using their pensions to help younger family members buy homes?

LONDON, ENGLAND - JANUARY 30: A general view of a row of houses near Clapham on January 30, 2013 in London, England. According to a report from independent analysts Oxford Economics, the average mortgage deposit for first-time buyers in London, is likely to exceed £100,000 GBP by 2020. (Photo by Dan Kitwood/Getty Images)

Should we be worried that some over-55s are using their pensions to help younger family members buy homes?

Yes – Helen Morrissey is a pension specialist at Royal London.

While it is natural for people to want to help their children get a foot on the housing ladder, the worry is that they could damage their own future financial prospects by doing so.

Circumstances can change, and what might seem like an affordable amount to gift now might not be in years to come, particularly if you are hit with care fees or large bills. This could leave you struggling on a much reduced income, or even going back to your children to ask for financial assistance. The issue is exacerbated by the fact that many of us are living longer, meaning we need our savings to last longer.

Your pension will likely be the largest amount of savings you will accrue, so it may be tempting to take out a chunk to help a family member buy a property. However, the concern is that some people may not be thinking about what their retirement needs are likely to be, therefore leaving themselves short of money in the future.

Taking financial advice should help to balance the need to generate a lasting income, while also helping family.

No – Angus Hanton is co-founder of the Intergenerational Foundation.

Experts tell us that we need a pension pot of £260,000, plus the new state pension of £8,546.20 a year, in order to live comfortably in retirement.

However, many people are also using housing as a way of investing their money, meaning house price growth tends to be positive for the older generations and bad for the young.

The over-50s now own three-quarters of all equity, with a total value of £2.8 trillion. The over-65s alone own 43 per cent of that equity, worth £1.6 trillion. It’s in their interest to sell high.

Whether it’s through pensions, unearned housing wealth, or other investments, financially speaking, many mums and dads are doing nicely.

They are also likely to inherit from their own parents, as inheritances tend to be passed down to children in their 50s and 60s, and less so to grandchildren.

So we don’t care where the intergenerational wealth transfers come from, provided they happen in order to redistribute wealth more equitably across the generations.