Pensions minister Steve Webb has defended Deputy Prime Minister Nick Clegg's plans to let parents use their pension to guarantee their children's mortgages.
The plans, announced at the Lib Dem conference, allude to a scheme in which parents would be able to use their pension commencement lump sum as a guarantee for their children's mortgages in order to overcome sky-high deposits.
The plans were widely criticised but Webb said the scheme's risk has been exaggerated by the media, and said the Prime Minister has no opposition to the idea.
"I don't think it has been discussed at length [with the PM] but certainly before any conference announcement is made conversations are had, so if the PM was vehemently opposed it might well not have happened," Webb said at the Professional Pensions Show 2012.
"Both Treasury and DWP officials are already working on the plan."
Webb said the scheme would not allow parents with several years until retirement to use their PCLS as a security, but said the scheme would be reserved for people just a few years from retirement.
"I don't imagine a mortgage lender would see a promise of a pension 20 years' hence as security," said Webb.
"We are talking about things that people do anyway, but flagging it ahead of time, helping people use their own money in a more flexible way. Some of the reaction I have had has been absurd. It is not remotely scary."
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