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Scottish Life entering the group Sipp battleground

Scottish Life is going head to head with Standard Life and Legal & General by introducing a group self-invested personal pension by A-Day.

The product will act as a personal pension, with the extra flexibility of a Sipp kick-ing in when it is needed.

Scottish Life says this means that directors with big pension pots can use the Sipp facilities immediately while employees with smaller funds will have the option later in their working lives.

Head of pensions strategy Steve Bee says: “I know we have lost the residential property option but that was just to make group Sipps look sexy. What we have is something that has got to replace final-salary pension schemes and this is not necessarily a bad thing.”

Intelligent Pensions technical manager David Trenner says: “I partly agree with Steve Bee but there are some comments from others that group Sipps will revolutionise pensions in the way that open architecture did. In some ways, this is correct as it is the next logical step but just because they are popular, it does not mean they are right for everyone.”

Syndaxi director Robert Reid says the move towards hybrid products reflects the fact that insurers will struggle to keep costs low on Sipps.

He says: “The thing with a group Sipp is that it ultimately depends on the financial deal you can get. If you can get it at a reasonable cost, which you can these days, why would you necessarily go through an insurer? Possibly for all the bells and whistles but is this enough in the long term?”

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