As the last of the mince pies are eaten and the decorations all taken down, thoughts turn to what 2019 will bring for the SIPP market. While SIPPs received a lot of negative attention in 2018, advisers and their clients still see the benefits of investing in this tax efficient way.
The SIPP market remains buoyant for those providers that have strong technical knowledge, high service standards, undertake detailed due diligence and are financially strong, holding more than the minimum capital adequacy requirements.

The consolidation that has taken place over the past few years in the SIPP market has reduced the choice available to advisers. It means that advisers need to be careful who they work with, so that they aren’t advising on a provider that may then be acquired by another that they wouldn't have wanted their client to be with.

The issue of non-standard investments is well known and understood by advisers but is almost off limits for most advisers and their clients due to the FCA requirements on SIPP operators, which means they are reluctant to accept these assets due to the high risks to their business and the capital adequacy requirements to hold them, and the due diligence required to vet them, however property remains very attractive for pension investors, there are still mixed views on property and its classification, is it non-standard or standard? Most SIPP providers view property as a standard investment if it is purchased in the UK, but each property investment still needs to be looked at by the SIPP provider.



I am sure 2019, like 2018 is set to be the year of property, with pension investors continuing to look at investing in bricks and mortar, be it their own business premises, an unusual property or just a sound investment.

There is also an increase in the number of pension investors buying development land. It is far more tax efficient to hold this asset within a SIPP, as it is then exempt from capital gains tax, so the gain once sold on for development is kept within the SIPP.

You can understand why in continued stock market turbulence investors look at something they can see and feel, perhaps something that helps them to secure their own and their family’s financial future.

Over the years we have been asked to assess some really interesting properties. Some of these ended up being purchased, others I’m afraid didn't quite meet the regulatory or due diligence hurdles. They have included an alpaca farm, a nursing home through to an investment in a small zoo, football ground and a salt farm. It isn’t just the warehouses and high street shops that you might initially think of; there is a whole world of interesting property investments available.

---

Elaine Turtle, Director, DP Pensions