The Financial Conduct Authority will consult on whether pension savings should be used to buy a first home in the summer, as part of its bid to widen homeownership. 

“One of the biggest challenges prospective homeowners face is raising a deposit,” Financial Conduct Authority chief executive Nikhil Rathi said in a speech on Friday at the JP Morgan Pensions and Savings Symposium in London. 

He added: “Australia, New Zealand, the United States, Singapore and South Africa all permit citizens to leverage their pension savings to buy a first home.” 

“Some have suggested we consider, carefully, similar approaches in some circumstances here in the UK.  

“This would rely on individuals having engaged with their pensions and saved in the first place.” 

But Rathi added there would be “trade-offs” to such as move. 

He said: “We would need to take into account the ability of savers to replace those withdrawn funds, the impact on house prices, and whether those individuals – and the UK economy – might be better served by investment in a wider range of productive assets.    

“And as we think more radically about the mortgage market and options to support homeownership, what might this mean for saving, including for pensions, more broadly?” 

However, Rathi pointed out there is a need for “radical” action to get renters into their own homes. 

He cited Equity Release Council estimates that 39% of renters believe they will still be renting in retirement. 

The UK’s largest regulator will launch a wide-ranging consultation “on the future of the mortgage market” in June. 

Rathi said: “When we open our discussion on the mortgage market shortly, we want to get ahead of this issue, not wait till we have an urgent problem upon us.” 

“Treating pensions, mortgages, savings and housing wealth as entirely separate challenges – must become a thing of the past.  

“If we continue to treat pensions, mortgages and savings as separate tracks, we will miss opportunities to help consumers get where they need to be.”