Government announces Sipp changes
New changes to self invested pension plans (Sipps) will now allow savers greater freedom.
The changes will make it possible to invest Protected Rights in the same way as other pension investments, allowing pensions holders to take full advantage of the investment freedom available within Sipps.
Currently protected rights - which are amassed from National Insurance rebates when contracting out of the State Second Pension - can only be transferred to a stakeholder or a number of other personal pensions.
However, the new ruling means Sipps can take advantage of protected rights.
Minister for pensions reform Mike O'Brien said: "These changes will give more flexibility and investment choice to people taking an active interest in the management of their pension fund.
"It will also be easier for individuals to transfer funds between different types of pension schemes, and to consolidate pension rights in one place."
Steve Latto, pensions development manager at Alliance Trust Savings, said: "Many individuals have a variety of pension arrangements that they have gathered over their working lives and these changes will make it easier for them to consolidate and manage their pension investments within a single pension product.
"It does, however, remain frustrating that pensions administrators will still need to track Protected Rights separately from other rights.
He added: "We are aware that the government is looking to simplify the position from 2012 but would encourage simplification as soon as reasonably practicable.
"At Alliance Trust we are working on making the necessary changes to our systems and procedures to allow transfers of Protected Rights into our Sipp products."
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