MMD condemns governments SIPP u-turn

My Mortgage Direct has condemned the government for taking away a much-needed savings vehicle by excluding residential property from the SIPPs rules.

The chancellors U-turn in this weeks pre-budget report should not have come as a complete surprise, says Cath Hearnden, director of MMD.

Hearnden says: We have always been slightly nervous of this scheme, simply because it seemed too good to be true.

She says the main losers are the many thousands of buyers who tried to get ahead of the game by proceeding with investment purchases.

Hearnden adds: 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 publics imagination to save for retirement. As a nation of homebuyers, this is the first savings scheme that has had real appeal and now the government has stamped on it. Its very disappointing.

She believes that it would only have been a small percentage of those investing residential property in a SIPP who would have been in a position to abuse the rules.

Hearnden adds:The majority of people simply dont have the funds to invest, and I dont 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.