Some 15 per cent of the estimated 85,000 current Self Invested Personal Pension investors took out a plan on the basis that they would be ab...

Some 15 per cent of the estimated 85,000 current Self Invested Personal Pension investors took out a plan on the basis that they would be able to include assets such as residential property in their own pension portfolio, according to research conducted by Brewin Dolphin Securities, the UK-based investment consultant.

In fact the UK Government’s volt face over qualifying assets for SIPPs could present an opportunity, said Brewin Dolphin. The financial services firm says the inclusion of property could have lead to mis-selling difficulties. There is also the risk that high net worth individuals will try to create large property portfolios with little in the way of diversity, said Brewin.

James Brooks, head of product services at Brewin Dolphin Securities, told WealthBriefing: "People tend to think they are experts on property for some reason. But they should be constantly reminded that this is a pension for your retirement and not be taken at all lightly.”

Mr Brooks said investors were also interested in including properties abroad in Spain and France, and this adds more complexity.

“We spent a long time looking at property companies abroad and it was hard to find a reliable platform to work from,” he said.

Despite the fallout from the UK Government's U-turn in December last year, the research shows that demand for SIPPs has remained strong. Some 17 per cent of a sample of almost 1,500 adults expressed interest in taking out a SIPP and nearly half of them are no less interested following the ban on exotic investments.

“People wanted to combine their pension with their wine cellar and so on, but you have to remember that you don’t legally own these assets, the trustee does. What happens when you come to retirement age and all your assets are tied up in wine? You could find it difficult to make these assets liquid, if you will excuse the pun,” said Mr Brooks.