Reports in the trade press suggest that delays in implementing a new computer system to manage UK pensions investments may have played a role in chancellor Gordon Brown's recent surprise changes to the new SIPP pension product.
A report from IFAonline cites research by the Association for Member-directed Pension Schemes (AMPS), which suggest that the new computer platform intended to manage the investment of property and other ‘exotic assets’ into self-invested personal pensions (SIPPs) is six months behind schedule.
HM Revenue and Customs body apparently told AMPS just weeks before the chancellor’s pre-Budget report that the IT system would not be ready in time for the proposed pension reforms in April 2006. Mr Brown’s report prevented property investments into SIPPs from gaining up front tax relief, thereby taking away much of the incentive to make such investments.
AMPS believes the Revenue’s admission help to shape the government’s view of the SIPP issue. John Bradley, chairman of AMPS, told IFAonline that, when we first started talking to the Revenue about this type of investment, we were telling them the problems they would have monitoring it, but they said there wouldn’t be any problems because of their computerized system of self-assessment.
Then [just three weeks before the pre-Budget report] we were told they were at least six months behind in their computerization program. Is it connected that three weeks later they pull the plug on residential property because they don’t have the systems in place, is it just a coincidence? he added.