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The Department
for Work and Pensions (DWP) has published final confirmation that
it will permit Protected Rights funds to be invested into SIPPs
from October 2008.
The announcement comes following the consultation on the matter
which closed at the end of February this year, and means that SIPP
scheme holders will finally be able to take full control of their
long term investments.
Up to six million people may be affected, with average Protected
Rights funds per person amounting to an estimated £16,500,
according to Hargreaves Lansdown.
Tom McPhail, head of pensions research at the firm, said: “SIPPs
have already proved hugely popular in the past few years, showing
very strong growth at a time when pension provision in general has
been declining. This development is likely to accelerate demand.”
However, the move, while being good news for SIPP savers, “could
be another nail in the coffin” for SSAS schemes according
to Standard Life and could result in large losses for insurance
companies with £100bn of the total £440bn funds in UK
Personal Pensions being made up by Protected Rights assets –
according to Hargreaves Lansdown.
The legislative changes will require that SIPP Schemes apply for
a contracting-out certificate before accepting Protected Rights
from 1 October.
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Pensions Age June 2008
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