The Government have blamed their U-turn on Self Invested Pension Plans, on the pensions industry, which it claims was 'encouraging abuse of the proposed new rules.' They got rid of plans just six months before they were due to take effect, which would have allowed self invested personal pensions to invest in residential homes.
But they have been criticised for this by the industry, as the whole purpose of the simplification process was to make it easier for people to save in regulated pensions, and part of that process was to have one set of investment rules instead of the diverse rules that we presently have.
The Government defended their decision, saying that people were abusing the rules by buying holiday homes, instead of building their pension funds for a solid retirement income.
Our view
Make no mistake, the rules on property purhase were amended because the Government would not have been able to afford the tax concessions as more and more would have actually thought saving in pensions worthwhile.