Self-invested pension popularity rising |
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Fri, 08 Apr 2005 01:00
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Let your imagination run riot with self-invested pension which now allow people with endless possibilities. From a 'mere' decade ago, the self-invested personal pension market has grown substantially and now there are over 100,000 in force. The reason attributed for this growth is people want more control of their retirement savings.
In fact the new pension tax rules to come into effect next year will provide additional boost to self-invested pensions. Although, there are some minor changes made in this year’s Finance Act, it should hardly have any impact on the plans previously announced.
| The benefit of self-invested pension is that individuals can save in more than one pension simultaneously and invest their pension in wine cellar, antiques and paintings, holiday home or buy-to-let. In short, they will be able to invest in anything they want or dreamt of.
But before investing, the savers will have to search for an administrator who is willing to allow such investments. Since administrators want these assets to be controlled through an agent and this is where the market will add its own reality check.
In fact the Inland Revenue has played a significant role in keeping pensions simple and also making saving for retirement attractive, by completely lifting of investment restrictions for starters.
The idea of investing one’s savings in different businessess has already started motivating people’s imagination after they were disenchanted with pensions.
Initially for most of the savers such investments may appear a hurricane task, but by combining existing paid-up pension funds and the higher contribution limits, savers can quickly built a sizeable fund.
Furthermore, the pension fund can borrow half of the accumulated pot, thereby boosting the amount available to shop for desirable investments.
Again some believe that self-invested pensions are expensive. But for people with funds of £50,000 plus, the self-invested pensions turn out to be much cheaper than a charge-capped stakeholder pension.
So, if you’re a business-minded individual, self-invested pension option makes a good package.
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