A new policy proposal could see young people gaining an extra £12,500 towards their house deposit by slightly delaying their retirement. Billed as a 'state alternative to the Bank of Mum and Dad,' the 'Citizens Advance' has been coined by the Social Market Foundation. The idea gives young people the option to unlock the first year of their pension early, solely to put it towards a house deposit.
The Struggle for Homeownership
With the cost of renting so high and earnings increasingly squeezed by inflation, putting any money aside for a house can feel impossible. This struggle is particularly poignant for many young people, as a 2026 study from Barclays found 34% of Gen Z who have managed to get on the ladder in recent months had support from the Bank of Mum and Dad. Among this generation, a further four in 10 (43%) say that relying on either inheritance or straight-up financial assistance is now completely essential.
How the Citizens Advance Works
The policy wouldn't automatically give everyone the right to withdraw their hard-earned cash. To qualify, they'd need to have been working for at least 10 years, with the National Insurance credits to back it up. So in reality, most recipients would be older Gen Z, millennials or upwards. The lump sum would be worth around £12,500, which is the current rate of the full state pension. If used in tandem, a couple could then gather a deposit worth £25,000, which the think tank says would almost match a 10% downpayment on the average home in the UK.
Origins and Inequality
The idea was first coined by Andrew Lewin, the Labour MP for Welwyn Hatfield, and is based on the idea of the 'Great Wealth Transfer,' which will take place as the current generation of young people inherit property from Baby Boomers. However, there's an inherent inequality within this: not everyone has grandparents with assets to pass down after their death. According to the think tank's research, this large-scale level of inheritance will see £5.5 trillion worth of wealth passed down to the younger generations, but a mere third of adults expect to benefit from this at all.
Public Support and Costs
Speaking to 2,000 25 to 40-year-olds as part of the study, the vast majority were in favour of the idea of early pension access (54%). Between 50% and 70% of people said they'd accept the advance, but this would depend on the value of the lump sum, plus any restrictions on how it might be spent. A further two-thirds believe the dream of property ownership is completely dead for their generation, while the so-called 'Bank of Mum and Dad' distributed close to £10 billion worth of deposits in 2024. In fact, more than half (52%) of first-time buyers relied on this source of income. The Citizens Advance could cost up to £1.3 billion in the first year, but this figure would depend on a few factors.
Eligibility and International Examples
Some of the ideas floated around are that applicants might undergo a 'financial health' check to identify those in greatest need; that it might only go to those from lower-income backgrounds, or that, initially at least, it might only be given to those born in a certain year. There are real-world examples of similar policies elsewhere. In New Zealand, first-time buyers are able to use their KiwiSaver retirement savings towards a home. They just need to have been contributing towards it for at least three years, and they can withdraw their own savings, as well as any contributions made by an employer. Young people have been taking advantage of it, too, as between 2024 and 2025, 43,600 withdrew funds solely for this purpose.
Other Uses for the Lump Sum
On the other hand, a house deposit isn't the only thing the lump sum might be used for. Debt repayment is also an option, which 18% said they'd use the money to cover if the terms didn't stipulate it needed to be used to buy a first home.
