Typically pension funds invest in stock and shares mainly, but Self-Invested Personal Pensions (SIPPs) are allowed to invest in commercial property. It’s quite common for Dentists etc to buy their surgery via the pension fund, which means that when they pay “rent” the money goes into their pension fund.
For Pension help & advice we recommend that you try:
Pension-Forecast.co.uk
or
Pension-Comparison.co.uk
From April 2006 the type of assets pension funds can invest in will be expanded - making investment in property easier for the average person.
The increase of buyers coming to the market in the form of pension funds could boost house prices considerably. This is great news for existing homeowners and property investors, who could see their buy-to-let returns substantially increase as the market booms.
On April 6 2006 new rules will come into force which, amongst other things, will limit lifetime pension contributions to £1.5 million, give greater freedom to what pension schemes can invest in (including property, art, and wine), and increase the age a pension can be taken on from 50 to 55.
On that date major changes will come into force regarding SIPPs.
Currently SIPPs, first introduced in 1989, can contain several types of investment - including commercial property. But after April 6, widely referred to as "A-Day", it will also be possible to invest pension funds in residential and non-commercial property overseas and receive certain tax reliefs. This effectively means that you will be able to buy your own home in this country and holiday homes via your pension funds.
This has to be good news for the housing market in general, and the buy to let sector in particular.
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