Occupational pension schemes and property

[overmonnow]

Amazing...a question about property and pensions, but NOT SIPP related!

Does anyone have any experience of an occupational pension scheme in the UK investing in property, be it residential or commercial, regardless of country?

Thanks in advance

Alistair

 

[Nick Trollope]

[quote user="Pebbles"]

Amazing...a question about property and pensions, but NOT SIPP related!

Does anyone have any experience of an occupational pension scheme in the UK investing in property, be it residential or commercial, regardless of country?

[/quote]

The UK rules for what can or can't be included in a PPS have recently been relaxed/changed - you can now include "investment wines" in the portfolio. However, you really need to ask a UK pensions specialist, but my guess is that you will be OK using a n O/S property as part of a pensions portfolio.

 

[Russethouse]

I'm not sure if this has any relevance but last week on 'This week' (its the program after Question Time in the UK) Andrew Neill and Micheal Portillo were discussing how Gordon Brown had rather 'fudged' this, leading many people to think that they would be able to have a second property as part of their portfolio and then at the last minute saying that they will not.

If that IS what you are talking about then I would contact a pension specialist before investing.

[moon]

Sorry Nick but Gordon realised his mistake and announced in his pre budget speech last week that none of these investments such as second homes, wines, art etc would now be allowed.

Bob [:(]

[LePaul<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"><SP]

The rules governing Occupational schemes are vastly different than those for Personal pension schemes. In essence, the Occupational Scheme has a larger basket of rules/guidelines by which the Trustees are governed. This is why Self Invested Personal Pensions have been such a successful investment tool.

I haven’t kept up to date (thankfully) with all the changes to IR76 and IR12 since the final publications of the new rules under Pension Simplification. I rather doubt that the Inland Revenue will allow Occupational Schemes - usually Small Self Administered Schemes (known as SSAS's) to follow the ORIGINAL route that the changes had appeared to allow SIPP's to go down. Despite the relaxation of the old Residential Property rulings and the old chestnut of Member Benefit, the Revenue will continue to police Occupational schemes, their member trustees and their Pensioneer trustees as rigorously as ever - in my humble opinion.

What I did notice last week in the Chancellors statement is that he withdrew the immediate tax relief that property purchasing pension schemes enjoyed. This in simple terms will kill off the concept for many schemes that would have hoped to acquired property post April 2006.

So - to be honest - while having been out of touch for 2 years or so - I would offer 1 word of advice. DONT HOLD YOUR BREATH. The old regimes might disappear to simplify but the anxieties of the Inland Revenue and its quangos will never go away.

[Will]

I don't know anything about the occupational schemes, but regarding SIPPs, from what I read in The Times when I was in England at the time of GB's pre-budget statement, he had specifically excluded rental income from second-home residential property - but it remained, at that time, unclear as to whether the actual capital gains from second home investments were allowable or not under his SIPP rules. I'm certainly not holding my breath (though as we are now French taxpayers, with a second home in Britain, and still with UK pension investments, it's an interesting situation).

[Tony the Turner]

The issue arising from GB's Pre Budget statement is that investment in residential property will not now be allowed in SIPPs so that capital gains or income therefrom do not arise.  When the new (i.e. post April 2006) pension rules were first announced, it was said that various assets which do not currently qualify for SIPPs would be allowed post April.  These included residential property in the UK and abroad as well as fine wine, works of art etc. 

As always, the whizz kids in the financial sector could see a killing for themselves and sought to persuade those with personal pension provision to pile into what, for many, could have been quite unsuitable "investments" - all eggs in one basket etc.  The net result is that the Treasury, albeit belatedly, has pulled the plug, much to the annoyance of said whizz kids. The reality is that the only

beneficiaries of abandoned schemes would be those with massive pension pots which

means, generally, those who don't do any real work. For most of us, life goes on as before and the nice lady at Scottish Widows will continue to look after my less than massive pot!

[Will]

Thanks - rather as I suspected.

Getting back to the original question, try contacting at the Pensions Advisory Service in Britain (www.opas.org.uk), formerly known as OPAS (as far as I know, no relation [:D] )

Is the 'nice lady at Scottish Widows' (at least according to the TV ads) not the same person who used to be the presenter of one of those much-maligned programmes persuading us to buy overseas property? [:)]

[Viv]

Yes Will, Amanda Lamb was one of the scottish widows women,  Roger Moore's daughter was also one a few years ago, a bit of useless trivia there.

[Jc]

According to last week's papers Scottish Widows are not doing very well.

[Tony the Turner]

Don't believe all that you read in the papers, or more accurately don't take headlines at their face value.

"Scottish Widows not doing very well".  Does that mean SW as a business is not well?  In which case, not my problem as I am not a shareholder. Does that mean SW is not performing well on the investment side, or more likely on one side?  Again not my problem, it all depends on which fund or basket of funds your investments are placed with.  Growth of over 25% over two years will do for me!

[LePaul<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"><SP]

Usually I find that the responses and associated information on this web site is of a high standard. I'm a little disappointed by the fact that the some posters here chose to use the platform for a side swipe

"As always, the whizz kids in the financial sector could see a killing for themselves and sought to persuade those with personal pension provision to pile into what, for many, could have been quite unsuitable "investments" - all eggs in one basket etc"

"The net result is that the Treasury, albeit belatedly, has pulled the plug, much to the annoyance of said whizz kids."

As someone who spent 25 years in Financial Services industry and specifically the pension market, I find it fool hardy for the above statement to be made. The use of Occupational and Personal pension schemes by the member under the strict guidelines of the various regulatory bodies which have governed, coupled with the very excellent products from many life offices and independent trustees and Pensioneer trustees, along with the highly reputable advice from the many many top draw IFA's have saved 1000's of people £1,000's and 100's of £1,000's in "voluntary tax" charges which they would never have been able to avoid without the above I have just mentioned. This still remains the case today - despite

1. The fact that the offices of the Inland Revenue have ONCE AGAIN - moved the goal posts for the formation of the legislation less than 4 months before it is due to be implemented
2. That the same offices have allowed the industry and its many components to believe that the final consultations were concluded and that no major changes would be announced
3. That this being the case the providers/life offices/trustees etc have spent £millions rebranding their products to suit the proposed changes to the Pensions arena
4. That all of this labour intensive work has to tossed into the perpetual bin of Inland Revenue waste as a result of their inability to research their new legislation accurately
5. That this cost will initially be borne by the providers but will, sadly but properly passed on to their clients, and despite this the providers are the ones who are called the whizz kids
6. That the new changes were there to help people use their pots to greater advantage to help them provide a better level of retirement income, especially in light of the lack of government provision for which people in the UK are paying now, and that the list of people above were preparing themselves to revisit their clients to ensure that the advice that had previously been given would remain constant, accurate and beneficial
7. That the Government and its offices can simply walk away from this disgraceful about turn and say - "Sorry - not our fault - we have duty of care and so on and on" while the providers will be seen as the baddies ONCE AGAIN or whizz kids as has been inferred here.

Let’s be accurate if we give advice or comment. Equally, let’s be very mindful of the fact that there are some folk who read these threads and take what we say as gospel and this in turn fashions their thinking.

So Pebbles - Alistair - I would suggest that rather than take 2 penny advice on such a very serious subject through this excellent Forum, contact an IFA and seek proper professional advice. Be mindful of the fact that he or she will have their head spinning just at the moment due to the latest statement from Mr. Brown and his folk.

This link may be of use - there are hundreds of useful sites but I'm a big fan of Steve Bee (who incidentally was one of my main competitors). He is always well worth a read. Good luck and sorry for ranting on and on.

http://www.scottishlife.co.uk/scotlife/Web/Site/BeeHive/BeeHiveHome.asp

http://www.scottishlife.co.uk/scotlife/web/site/BeeHive/BeeLines/BHBLDec05Page5.asp

[Tony the Turner]

Toys back in pram time, I think.

If LePaul thinks that all the IFA's are entirely altruistics, he clearly misconstrues his colleagues motives.  As for the way the industry looks after the punters, a few words may put the record straight.  Try Equitable, Aberdeen, London Life and a string of IFA's whose names will be familiar to anyone who reads the financial pages of any of the broadsheet newpapers.

[LePaul<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"><SP]

Good man - Tony - I cannot argue with you regarding the companies that you mention. Is there a strange coincidence that ALL of the companies that you mention advertised in the major high brow broadsheets, sold their products to those of a similar ilk, and targeted same. As soon as the environment gets tight then the judiciary, the politicians and those with whom the wonderful Equitable and London Life's of this world plied their wares, were the ones who fell from the greatest heights.

For decades, the industries folk complained about the relaxations that were afforded to these very same companies - but due to their target market - to some it would seem that they were protected by the higher few. Sorry but I have little, in fact, no sympathy for them, especially as I had to spend many laborious hours undoing the flagrant mis-selling that had taken place within these chosen few.

Tony - ultimately, the industry needed 1986 and the FSA but that does not - now, then or ever - mean that for corporate pension clients the advice given by the vast majority of the IFA's in the UK was anything but excellent. I know this as I have first hand experience from both the advisory and consultancy side.

As for your few words - well I believe that I have redirected them. Look at Scottish Life, National Mutual, Scottish Equitable, Standard Life and many others. These were the companies who continually provided the best products, at the better placed charging structures giving the more accurate and educated service levels. Not akin to those offered by the high brow companies who were RIGHTLY exposed for what they were.

Now - to the point raised by Alistair - I think that you will find that there is plenty of scope to utilise your occupational benefits if this is the right thing to do. The fact that you need to determine what is the right and what is the potentially wrong thing to do - is of equal importance - and must be the first step along your journey.

Good luck