7 October 2008<\/p>
The Department for Work and Pensions recently confirmed that from 1st October 2008 it will be possible to transfer your Protected Rights funds into your Self Invested Personal Pension (SIPP).
Protected Rights are the pensions industry terms that identify the pension benefits from Contracting Out of the State Second Pensions Scheme (S2P). (S2P used to be called the State Earnings Related Pensions Scheme or SERPS). Effectively pension monies built up by redirection of National Insurance rebates.
At present, protected rights must be invested in insured funds, bank deposits or mutual funds such as OEICs. Some Providers currently get around the self-investment restrictions by creating a member-directed insured fund. However, these changes will allow complete freedom to invest directly – for example in UK Equities.
Alan Philips a Director of Financial Services at Brewin Dolphin, the UK’s largest independent private client portfolio manager, commented “This development makes the argument for consolidating pension arrangements even more compelling. It is a great opportunity for individuals to have more investment choice and gives them the chance to bring all their separate arrangements into one more manageable pension plan, with the added potential of reducing overall costs. For those individuals who already benefit from having their pension arrangements fully self invested this provides for all their pension assets to come under the same roof.”
Currently the existing SIPP Provider must obtain Appropriate Personal Pension status before they may accept protected rights funds, however at Brewin Dolphin we expect that most existing SIPP providers scheme’s will have made application for appropriate status before the changes came in yesterday.
Whilst all these are attractive points to consider, we at Brewin Dolphin recommend that individuals seek specialist financial advice before deciding to transfer any of their pension pots.
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