Self Invested Personal Pensions To Be Regulated

Wed, 28 Sep 2005

Another fear of mis-selling scandal looms in an already scandalous world of pensions. This time it involves the sale of self-invested personal pensions, known as Sipps.

Norwich Union, in the interest of consumer protection, recently called for regulatory intervention to protect savers.

Currently no authorisation is required to sell Sipps. The fear is that unauthorised salesmen will only promote the advantages of Sipps and fail to inform the consumer of the disadvantages, which can include, additional costs, investment risk and potential tax liabilities here and overseas.

Its became apparent that some of the marketing of Sipps is over-simplistic for what is a very complex and life long decision.

Regulation is needed to ensure that rewards and risks are communicated clearly and the consumer is aware of the full facts before making the decision.

The pensions industry is already the least trusted industry - bad advice to leave company pensions to buy personal pensions during the 1980s and 1990s resulted in massive compensation bills - and most reputable insurers are keen to avoid repetition of this and to build a trustworthy industry.

The treasury is expected to make an announcement in the next couple of days that it is considering regulating the sale of Sipps.
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