Scottish Widows: new rules for protected rights within SIPPS

Ian Naismith, Head of Pensions Market Development comments: "Scottish Widows welcomes the relaxation of rules on protected rights to allow access through most SIPPs. It is sensible that there should be as few restrictions as possible on how consumers choose to invest their money. However, we are concerned that many people could be advised to transfer their protected rights into a SIPP without realising the effect of charges under their new arrangement, which could well be higher than for their existing personal or stakeholder pension. We believe strongly that all transfers into SIPPs should be accompanied by full disclosure showing the possible pension at retirement and the effect of charges. This is particularly important for protected rights where consumers have given up a pension guaranteed by the Government and could see the replacement pension eroded by high charges.

"We urge the FSA, as part of its current review of transfers into personal pensions and SIPPs, to bring disclosure standard for SIPPs up to the level that applies for insured personal pensions. In designing the Scottish Widows Retirement Account our consumer research told us that many people prefer to consolidate their pensions into one arrangement, and we structured it so that we have already been able to offer self-investment of protected rights for over a year. The rules change will allow other providers to do that from October."