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Practice property is a way to make your private pension pay

Justine Roberts of Pulse Financial Consultants looks at the most flexible of private pension options, the Self Invested Personal Pension, and finds that investing in practice property is one way of making them pay.

Justine Roberts of Pulse Financial Consultants looks at the most flexible of private pension options, the Self Invested Personal Pension, and finds that investing in practice property is one way of making them pay.

This week pensions have again been a hot topic for us, with more doctors making enquiries as to the best place to invest their money for retirement.

There are different types of private pension arrangements available to GPs, but deciding which is appropriate is dependant on a number of factors; the total level of contributions, the time left to retirement and whether the purchaser wishes to play an active part in the management of the funds, to name just three.

Today I specifically want to talk about SIPPs, as we've talked about stakeholder pensions and personal pensions before.

A few things to remember whichever type of pension is chosen, all pensions receive tax relief at the highest marginal rate of the contributor, basic rate tax relief is received at source for the vast majority of pensions with just a few very old schemes still paid gross.

Many GPs consider planning via a Self Invested Personal Pension (SIPP); these are the most flexible of all pensions allowing individuals to self select certain investments.
The Pension Simplification Act of 2006 implied it would allow a wide and diverse range of investments, buy to let property, classic cars, holiday homes abroad, however this has not come to pass.

Unfortunately HMRC do not publish a definitive list of what can and cannot be contained in a SIPP; however they do not like residential property and tangible property.

Residential property is that which is habitable and may include ancillary buildings and land such as gardens and garages. Tangible moveable property is that which can be touched and moved and includes fine wines, antiques and classic cars – all assets that we had hoped would be included!

Specialist SIPPs have an element of flexibility but have high set up charges, and annual charges for the privilege in investing. The lowest cost option is from fund and life company providers, but they tend to have their own branded funds and cash which are the only investments allowed in their SIPPs.

The FSA has concerns about the cost, service and sustainability for investors taking out their first SIPP, or transferring to schemes that offer more flexibility.

However, SIPPs do allow for a range of assets that other pension do not allow for. Most interesting for a GP is the use of a SIPP to purchase practice buildings. Purchasing business premises via a SIPP is a very tax efficient method of purchasing premises whilst receiving full tax relief.41211053

For investors who wish to take a more active role in their pension planning SIPPs also allow self selection of individual shares and equity funds, thus giving more control.

SIPPs do not come without charges; the extra investment options they have do not come without a price. SIPPs are the most expensive of the three options for pension planning, and are not good value for money if it is not the intention to fully use the investment flexibility.

When planning for retirement it is important to consider the above factors to ensure that the chosen pension is appropriate to ensure a secure retirement and that you are not paying for pension options that are unlikely to be used.

Justine Roberts of Pulse Financial Consultants Justine Roberts of Pulse Financial Consultants Cash ISA rates Mortgages Contact Pulse Financial Consultants

Pulse Financial Consultants can be contacted by clicking the image above or by email at

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