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BeeHive  >  BeeLines  >  Call for debate on SIPPs

Call for debate on SIPPs

I know you’re probably all fed up with me going on about SIPPs so much this week, but I think that the exchanges going on in the House of Commons on the subject at the moment are important.  The weekend papers are bound to pick up on the rumblings from what I guess could be called the ‘countryside lobby’ whose genuine fears are that extra money coming into the housing market from pensions could push up house prices too far for local economies to bear. 

The following extract from yesterday’s Hansard will give you a flavour of what’s being said:

Hywel Williams (Caernarfon) (PC): May we have a debate on investment in residential property through self-invested personal pension schemes—SIPPS? The Government intend to change the rules from April and that has given rise to fears of an unsustainable bubble in house prices, particularly in rural areas and in holiday areas such as mine. In addition, because the selling of SIPPS will be unregulated there are fears of mis-selling, as voiced by Mr. Iain Oliver of the Norwich Union. Might we have a debate on that?

Mr. Hoon: I have seen newspaper articles expressing similar concerns to those properly raised by the hon. Gentleman, but I emphasise that what is important to the Government and, I hope, to all Members, is that we encourage people to take greater responsibility for their pension arrangements. Any incentives to make better provision for pensions must be welcomed. I certainly take account of his concerns. 1

To me this is far too late in the day for these important issues to be debated.  The consultation on all of these important and retrospective changes to the pension tax regime ended a long time ago and we are now just a few months away from the appointed day (A-Day for short) when it’s all coming down.  (Those of you who didn’t know the A stood for appointed, by the way, might want to make a mental note of that in case it comes up at a quiz night or something.  I’ve only just found out about that myself and I dropped it in there to be flash.) 

The thing about residential property investment for pensions in the new world after A-Day is that it is something that has caught the attention of the general public in a way that no other positive pension issue has.  It says “Pensions are sexy” to Joe and Josephine Average and that has to be a good thing.  Investing in property, whether in rural areas of the UK or abroad, has never and will never be the easiest thing to do.  It seems to me unlikely that millions of people will do it.  But the small number who do will be used by the press in story after story that will generate more positive feelings about pensions in general than any amount of advertising or comment from within our industry.

If we lose this good news story in the run-up to A-Day the effect will be just the opposite.  It will become yet another piece of bad press for pensions and the feel-good factor that A-Day was designed to produce will not happen.  The government line on this is right; the whole point of these changes is to give people more control over their pensions.  Anyone who read my Chubby Cats BeeLine on the importance of personal control will know where I stand on this.  Pensions that people can control are bound to be more popular than pensions that control people.  It’s not that hard to work out.

Steve Bee

21 October 2005

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1. House of Commons Hansard Debates 20 Oct 2005 : Column 991