Scottish Life head of pensions development Steve Bee says the Government has grossly underestimated the boost that residential property in pensions will give to the housing market.
Bee told PIMS delegates on board the Oriana last week that he would put £120,000 in a personal pension on A-Day and use the fund to buy a £200,000 property in France.
He said the Treasury's impact assessment was flawed because it had only considered the 1.3 per cent of personal pension holders who had self-invested personal pensions as likely to invest in property when full concurrency means that occupational sch-eme members will buy property in Sipps. He said people owning second homes would start to do so in Sipps as a matter of course because it is a tax-efficient wrapper.
He said it was inevitable that after A-Day, some of the £1.2trillion in UK pension funds would find its way into the domestic and overseas housing markets, causing upward pressure on property prices.
Bee said: “The pompous regulatory impact assessment did not take into account the changing world. I am in a finalsalary scheme but the first thing I will do after A-Day is put £120,000 into a personal pension and buy a £200,000 property in France.
“You would have to be naive to think that pension money is not going to find its way into property when, after A-Day, full concurrency means everyone can use Sipps.”
Informed Choice managing director Nick Bamford says: “People need to be careful to have a balanced pension portfolio but it could well be that having an overseas property that you rent out and use from time to time will prove attractive.”