Auto-enrolment for pension schemes should be opened up to staff wanting to save for a mortgage deposit, a think tank has claimed.

A report by Localis, Disrupting the Housing Market, suggests letting staff auto-enrol into the recently launched Lifetime Isa (Lisa) through their employer as this products lets them access the funds to put towards a deposit.

The research by Localis, found 58% of those who don’t own a property are saving nothing at all each month for a deposit to buy a home in the future.

Instead, the report argues, the Government should make deposit saving a more attractive option by giving the option to enrol into a ‘Lisa’ for 18- to 40-year olds – the age range to be eligible for the product.

The Lisa lets first-time buyers save up to £4,000 tax-free each year with the Government paying a 25% bonus on contributions. The money saved can be put towards any home worth up to £450,000.

The report said: “One of the most important steps Government can take to save the home-owning democracy is reforming the ways in which people can save for a mortgage deposit. The current laissez-faire approach is simply not working.

“Government, therefore should make deposit saving a more attractive option. The auto-enrolment of employees aged 18-40 to pension schemes by employers should include the option to make contributions towards a Lisa.

“Employers should be expected to make contributions equal to 3% of the employee’s qualifying salary and, as with the Lisa, Government should continue to match 25% of employee contributions.

“This would revolutionise the way by which deposits are saved for.”

The research also suggests giving local authorities discretion to re-designate greenbelt land and calls for State investment in – and ownership of – new housing factories to help build new modular homes.

Jack Airey, head of research at Localis, said: “Whether out of choice, or simply because they do not have enough money at the end of each month to do so, a majority of people are not building any financial capacity with which to get a mortgage and purchase a home in the future.

“This crisis of saving transcends people of all tenures, ages, regions and socio-economic classes yet these consequences are underappreciated, least of all by non-homeowners themselves. Under this auto-enrolment scheme, rather than relying on the ‘Bank of Mum and Dad’, employers and Government would help young people on to the housing ladder.”