SIPP providers are being increasingly targeted for "loan buddy" business, a prime vehicle for pension leakage, warns Andrew Roberts, chairman of Association of Member Directed Pension Schemes (AMPS.)
A "loan buddy" is where two loosely connected parties lend to one another in tandem through their SIPPs. Roberts said: "You have to treat it with a pinch of salt if the loan is going to be unsecured and ask why is one [SIPP investor] lending to one and the other lending to the other." At the last AMPS workshop held in February, 28% of 100 SIPP specialists revealed their firms had been approached by people wanting to use SIPPs for this purpose. Barnett Waddingham, where Roberts is currently partner, has also recently refused such proposals. Roberts revealed that IFAs have been direc...
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