The broker roundly condemns the Government for taking away a much-needed savings vehicle by excluding residential property from the new SIPPs rules.
The Chancellor’s U-turn in this week’s pre-Budget report should not have come as a complete surprise, according to Cath Hearnden, director of broker My Mortgage Direct.
“We have always been slightly nervous of this scheme, simply because it seemed too good to be true,” said Hearnden.
The main losers, she said, are the many thousands of buyers who tried to get ahead of the game by proceeding with investment purchases.
“Now, instead of taking comfort in the knowledge that their pension pot is thriving, many investors will find themselves struggling with an unexpected financial burden.
“The Government has missed a rare opportunity to capture the public’s imagination to save for retirement,” said Hearnden. “As a nation of homebuyers, this is the first savings scheme that has had real appeal – and now the Government has stamped on it. It’s very disappointing.”
It would only have been a very small percentage of those investing residential property in a SIPP who would have been in a position to abuse the new rules, she added.
“The majority of people simply don’t have the funds to invest, and I don’t believe that either the cost to the public purse or the first-time buyer housing market would have been anything like as extensive as the Government implies,” concluded Hearnden.
