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White Paper is set to free protected rights

Suffolk Life sales and mark-eting director John Moret believes the Government’s White Paper on pensions could finally lift the restrictions on protected rights.

The White Paper, which says there will be a Government review of pension regulation, says restrictions on changes to accrued rights will be reassessed, potentially allowing protected rights to be held within a Sipp.

The review forms part of the Department for Work and Pensions’ simplification programme of pension rules, to be published this year.

The DWP amended regulations so that from A-Day, an arrangement such as a Sipp could be held within a wrapper of an appropriate scheme without invalidating the scheme’s contracting-out certificate.

But the market expressed disappointment at the failure to allow Sipps to hold protected rights.

Moret says: “This could provide a further boost to Sipp- type propositions as an aggregation/consolidation vehicle.

“The proposed consultation on the reform or removal of restrictions on investment of protected rights is to be welcomed. This paves the way for protected rights to be allowed into a Sipp. I cannot think what else the review could mean to do other than this.”

A DWP spokesman says: “The Government will be looking at ways to remove, merge or simplify many of the layers of legal requirements introduced in the 1995 Pensions Act.”

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