Singapore let citizens buy homes with locked pension savings

Singapore's Central Provident Fund began in 1955 as a compulsory retirement savings scheme, launched by colonial authorities on a proposal from David Marshall's Progressive Party as a cheaper alternative to a British-style state pension: both employers and employees paid 5% of wages into individual locked accounts. Separately, the Housing and Development Board's 1964 Home Ownership for the People Scheme offered citizens low-interest mortgages to buy new public flats — but take-up in the scheme's first four years fell well short of expectations.

The obstacle wasn't the mortgage rate; it was the 20% cash down payment the loan still required upfront. Most Singaporean households, especially the working-class families the housing program most wanted to reach, simply didn't have that much cash on hand, no matter how affordable the ongoing mortgage payments themselves might be.

In 1968, the government extended the CPF scheme with the Public Housing Scheme, letting citizens withdraw and apply money already sitting in their locked CPF retirement accounts toward the down payment and monthly mortgage on an HDB flat, rather than having to save new cash on top of their existing compulsory contributions. As Lee Kuan Yew later put it, the compulsory pension scheme had "forced everyone to save money that... should be used for a down-payment on a new home" — the government simply repointed savings that already existed, mandatorily accumulated for a different purpose, at the sp