The Sipp market will grow dramatically as those app-roaching retirement look to consolidate their pe...
The Sipp market will grow dramatically as those app-roaching retirement look to consolidate their pension fund assets under a single wrapper.
That is the prediction of Colin Maloney, pensions development director at Jupiter, who said intermediaries would have to ensure the advice they give on switching providers and administrators is both financially sound and justifiable.
'People will want to consolidate their pensions into a Sipp under one administration route and diversify their investments within one package,' he said.
Maloney added it will be important to ensure the new pension provider does not restrict investors' investment freedom and claimed traditional pension funds are failing investors 'because they are just hugging the indices, which are falling.'
Alan Wells, divisional pension manager at Norwich Union, noted the FTSE All-Share index was down 27.7% in the 12 months to August 2002, while the average balanced managed unit price was down 18.2%.
Figures from James Hay show Britain's Sipp market has grown from slightly less than £6bn in 2000 to about £14bn in 2001. A further £4bn is currently in drawdown, which James Hay's Steve Conley said has helped boost the Sipp market.
A survey by Abbey National for intermediaries has suggested the Sipp market will grow from around 77,000 Sipp plans now to around 500,000 by 2012. Even so, the Sipp industry is still dwarfed by the assets in defined benefits schemes, at around £800bn, and in the defined contributions policies, at £200bn.
Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October