Young people struggling to buy their first home will be able to unlock their parents' retirement funds to help secure a mortgage, under controversial plans unveiled by Nick Clegg.
The Deputy Prime Minister announced proposals for getting more people on the housing ladder as he sought to reassure anxious Liberal Democrat activists that the coalition was working for them.
In a thinly-veiled swipe at Chancellor George Osborne, he also insisted the junior coalition partner would block "wild" Tory calls for £10 billion more to be slashed from the welfare budget.
The developments came on the windswept second day of the Lib Dems' autumn conference in Brighton.
Mr Clegg said: "We have thousands of young people who are desperate to get their feet on the first rung of the property ladder but deposits have doubled and the number of young people asking help from family members has doubled.
"So I can announce today that the Government is going to do something that hasn't happened before: we are going to work out ways in which parents and grandparents who want to help their children and grandchildren buy a property of their own, we are going to allow those parents and grandparents to act as a guarantee, if you like, so their youngsters... can take out a deposit and buy a home."
Aides stressed that details of the scheme had yet to be finalised, but it will see the lump sum element of pensions used as collateral for raising home loans.
Hundreds of thousands of people could be eligible for the arrangements, which are expected to be in operation by 2015. They will lose their lump sum if the child defaults on mortgage repayments, but the rest of the retirement fund would be unaffected.
However, experts warned that the proposals risked leaving people short when they came to give up work.
Otto Thoresen, director general of the Association of British Insurers, said: "Pensions are designed to mature into a decent retirement income, not for other purposes. Any scheme which uses pensions as a guarantee must ensure that it does not inadvertently make the saver worse off when they retire."
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