Rock safe investment?

Pal

It is currently impossible to put that much money into any pension scheme, let alone a SIPP. It would have to be contributed over a number of years or wait until 2006 when the new contribution rules come in. BML also doesn't want an annuity so it is inappropriate for that reason.

Apologies if I seemed a bit harsh Paul! It wasn't intentional.

The only use I can see for SIPPS (for anyone who is not just a compulsive equity gambler), are very specialist portfolios. For example, someone who is buying a specific portfolio of fixed income bonds that mature on a specific date to meet a known requirement (e.g. a pension mortgage).

If you do not have specific needs and are just trying to maximise your retirement funds, you can do that through investing in funds through a normal stakeholder or a Personal Pension. When it comes to fund choices, SIPPS are rarely more flexible except in very specialist funds that most people should be avoiding anyway, but they generally have higher costs.

Which is why I don't like them. That said, if you are already wealthy and don't need the money to retire on, by all means gamble using a SIPP. You might get lucky. Not exactly "rock safe" though.

In terms of pension policies, £100,000 is unfortunately not a great deal of money. Add another zero on the end and I can see why someone would start wanting to do something special with the excess, but £100,000 is only going to be a pension of about £6-7k a year. Not something I would gamble with unless I had a lot of money elsewhere, which BML says he doesn't.

(just to point out that Stakeholder doesnt always mean cheapest as was posted on this thread).

Where is it posted? I can't see it.

DiggingOut

The only use I can see for SIPPS (for anyone who is not just a compulsive equity gambler), are very specialist portfolios.  For example, someone who is buying a specific portfolio of fixed income bonds that mature on a specific date to meet a known requirement (e.g. a pension mortgage).  

I suppose one other reason would be when the rule change comes through allowing residential property to be included in your SIPPS. Don't know if it has yet, or the details, haven't really followed it, but I suppose for some people this might be something to consider. Depends on your view on risk and how you see the risks of the housing market at the time. Right now, seems like a huge gamble, but maybe in a couple years, who knows?

Pal

I agree, that might be of interest. The main problem with the proposals that I saw (I haven't kept up to date with it) is that you can only borrow up to 50% of the property price. So it is only going to be of interest to anyone who has already got a very large pension fund and is willing to invest a large chunk of it in a single property. If they keep that rule, the new flexibility is still only going to apply to a relatively small number of people.