Sipps can hold protected rights from October

Investors will have more choice from October following changes to pensions rules allowing protected rights to be held in Self-Invested Personal Pensions (Sipps), Minister for Pensions Reform Mike O'Brien announced today.

The DWP has issued its response to the consultation on draft regulations allowing Sipps to hold protected rights.

Mike O'Brien said: "These changes will give more flexibility and investment choice to people taking an active interest in the management of their pension fund. It will also be easier for individuals to transfer funds between different types of pension schemes, and to consolidate pension rights in one place."

At present, individuals cannot transfer their 'pot' of protected rights into a Sipp. The view had been that rights intended to replace State benefits forgone - by people who contracted out of the State Second Pension - should not be subject to the risk that can arise from self-investment.

However, existing restrictions preventing Sipps from holding protected rights are now considered unnecessary following changes which brought all personal pensions - including Sipps - under the FSA's regulation from April 2007.