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Sipps go ballistic with £2.5bn sales

Sipp sales have rocketed since A-Day to become a £9bn a year business but group Sipps have failed to take off so far, according to senior industry figures.

Speaking at a Money Marketing Sipp round table, Standard Life head of pensions policy John Lawson pointed to recent figures from the Association of British Insurers which showed that its members had written £2.5bn of Sipp business in the first half of this year and sales are on track for Sipps to become a £9bn a year business.

Panellists also highlighted the recent news that Sipp provider AJ Bell is writing £120m of Sipp business a month.

Hargreaves Lansdown head of pensions research Tom McPhail said: “Sipps are going ballistic. An awful lot of money is coming from discontinued insurance contracts.”

He said even providers that had dismissed Sipps before A-Day had now launched their own offerings or were planning to do soMcPhail said: “We have had several providers rubbishing Sipps, saying they were over-hyped and over priced but now they are saying they are bringing one out and playing catch up. Because they were slow off the mark, this is a defensive strategy.”

But in stark contrast, Richard Jacobs Pensions & Trustee Services principle Richard Jacobs described group Sipps as a “misnomer” and McPhail argued that the volumes are not there at the moment.

Hornbuckle Mitchell director Neil Marsh said he is doing a steady stream of group schemes but predominantly for property purchase.

Lawson said a lot of group Sipps being set up by Standard Life are for property purchases but argued that group Sipps are essentially GPPs and needed to be priced accord- ingly. He said: “To some extent, they are a misnomer but we need to run group Sipps more cleverly and at similar charges to GPPs to attract business. We are seeing lots of big business schemes move to Sipps and wealthy employees are cert- ainly interested in it.”

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