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A-Day will open up Sipps for two million people

Pension simplification could see the market for self-invested personal pensions open up to two million people, according to research by consultancy Jardine Lloyd Thompson.

Higher-rate taxpayers are currently restricted in the way they can invest in personal pensions if they are members of their employer’s pension scheme. But these rules are to change, opening the floodgates for an estimated two million more people, says JLT.

There will also be a number of changes to pension rules that will allow a wider range of investments to be placed in Sipps.

If Sipp arrangements are made based on salary sacrifice or bonus sacrifice, JLT says the benefits could be even more attractive to potential investors.

Some employers are also expected to look at using Sipps as part of their flexible benefit packages.

Another change means that after A-Day, investors who are in occupational pension schemes will also be able to participate in Sipps.

JLT managing director Duncan Howorth says: “It has been apparent that the changes which the Gov-ernment has announced will increase the market for Sipps but we decided to undertake research to determine just how many people this could affect. I was surprised but, looking at the date, I think we might even be conservative in our estimates.”

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