Did the Budget hit home for your employees?

The Budget backed first-time buyers. Now employers can help employees save for a home, and for retirement.

Take a step back from the headlines, and the Budget was a big moment for anyone hoping to buy their first home.

For many younger employees, the biggest money question isn’t about retirement – it’s whether they’ll ever own a home. The answer isn’t to put pensions on hold; It’s to help employees see how they can work towards both goals, with a plan that makes sense for what they can afford.

That’s where the latest Budget announcements come in. They may have come in piecemeal fashion, but if you join up all the dots, this was effectively a first-time buyer’s Budget. After industry consultation, the Chancellor confirmed a new First Time Buyer ISA from April 2029 and a new Your First Home scheme offering 20% equity loans on new-build homes. He also made an immediate change to the Lifetime ISA, so savers no longer pay a penalty if their first home costs more than £450,000.

While these changes may seem small set against a stark housing crisis, together they make saving for a first home fairer and more achievable. Of course, these government schemes being available is only half the story. Employers can turn a collection of policy changes into something that can really move the dial for their employees.

The bigger question on employees’ minds

We know many people aren’t paying enough into their pensions, and adequacy remains a real challenge. But for many of their people, especially younger employees, there’s a bigger question on their minds: When am I going to be able to buy my first home?

This Budget suggests the government are now responding. So, for employers, now the ball is in your court. The challenge is twofold: how do we help employees achieve their retirement goals and their hopes of buying their first home at the same time?

The good news is that employees don’t have to choose. The new First Time Buyer ISA is for buying a home only. Unlike the Lifetime ISA, it won’t double up as a way to save for retirement. But the workplace is the natural place to bring the two goals together: a pension for later life, and payroll savings for a deposit in the near term.

What employers can do now

So how can employers help their people get on the housing ladder, without losing sight of saving for retirement?

Start with what your people need: This is about better communication and employee education. Respond to your employees’ actual needs, rather than simply signposting the products that might help. For example, nobody signs up for a webinar about a new type of ISA, but plenty of people will make time for a session on getting on the housing ladder. You address the question head-on – how can you help me buy a home? – then bring in the schemes and products that can help, from the Lifetime ISA today to Your First Home and the First Time Buyer ISA in the years ahead.
Make saving easy: Auto-enrolment has shown us what works. When saving happens automatically, with your employer’s backing and guidance you trust, people are far more likely to start and stick with it. Offering a workplace Lifetime ISA, with contributions taken straight from pay, brings that same ease to saving for a deposit.
Keep retirement in the picture: Saving for a home should never come at the expense of saving for retirement. Offering workplace savings alongside your pension, ideally in one place, helps people see both goals side by side and make progress on each.

Remember, there’s no need to wait for the First Time Buyer ISA in 2029. With Your First Home needing a deposit of just 2.5% from 2027, employers can start helping their employees save today. And owning a first home can start to feel less like a pipe dream and more like a plan.

Find out more about how Cushon could help your workforce achieve their future financial goals.