Gov't 'shot itself in foot' over SIPP borrowing

The SIPP provider says since 6 April 2006 the amount of tax relief it is claiming on behalf of its SIPP clients is around 20 times higher than before A-Day, as members are maximising contributions in order to fund a property purchase. Before A-Day, members of a SIPP could borrow up to 75% of the value of the property with a maximum of 25% coming from the pension fund. This meant a fund of £125,000 was needed to purchase a £500,000 property. However, from 6 April last year the government has restricted borrowing to just 50% of the scheme’s assets, which requires clients to invest much la...