A South coast broker has begun a campaign to have residential property deemed allowable for Self Invested Personal Pensions (SIPPs). Hove-based independent financial adviser Tony Catt has designed a pension enabling younger people to get onto the housing ladder using their pension fund as a deposit on either a home or buy-to-let property.
He said: “For young people, this would give the incentive of tax relief to save for the deposit for their first property purchase. The remainder of the money could be borrowed in the normal manner, or alternatively from the pension scheme provider.”
After buying, investors would continue to contribute to the pension in the normal manner. Over time, the amount used for property would become a smaller fraction of the fund. Catt suggests the scheme be limited to the first house purchase and that cash be repaid in the future from the equity in the property on resale.
An Inland Revenue spokesperson said: “We released a pension simplification consultation document, inviting comment from interested parties. The responses are now with Government ministers for consideration.”