Pensions regulations changes at A-Day will make it more difficult to borrow against one's personal pension, a financial adviser has said.
The new rules for the UK pension system will be put into place on April 6th 2006 and will allow members of pension funds to borrow only 50 per cent of the value of their Self-Invested Pension Plan (Sipp). Currently this stands at 75 per cent.
Adrian Boulding, speaking on Legal and General's Driven to Retirement website, said that those who want to use pension funds to secure a commercial property should consider the length of time the purchase may take and act now.
"Clients who are thinking of using their Sipp to buy a commercial property, or even to pay for improvements to an existing property, the message is 'don't delay'," he said.
But Mr Boulding also claimed that the new pensions regulations would present benefits to pension holders, as the regulations on what a pension fund member can put into a Sipp will be relaxed.
These will allow the chance to invest in residential property, which he says "may appeal to clients who already have substantial pension assets in traditional funds".
His remarks come as it was found that three quarters of the country know nothing about A-Day, with six per cent believing it to fall on April 1st.
The survey from Norwich and Peterborough building society suggested a significant amount of people were not prepared for the pensions regulation changes.
Pensions regulations mean borrowers should speed up
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Pensions regulations mean borrowers should speed up
Thu, 29 Sep 2005
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