Chancellor was only formed in 2006 — but this belies our advisers’ wealth of experience in the pensions industry.
For many years, the backbone of the Chancellor business and its predecessors has been work on bespoke pension schemes such as Small Self-Administered Schemes (SSAS).
The legislation related to this type of pension arrangement was first introduced back in 1978 — the year before one of our Chartered Financial Planners, David Heaton, entered the financial services industry.
Bespoke pension schemes such as SSAS and Self-Invested Personal Pension Plans (SIPP) are not restricted to the traditional types of unitised investments that holders of many Defined Contribution Pension Schemes are faced with.
One option which has traditionally appealed to owner-managed businesses in particular is the option to acquire commercial property within the scheme. And with a 40-year track record, this type of scheme is no ‘flash in the pan’.
We were recently approached by a corporate client who traded from a commercial property that was personally owned by the Directors.
A thorough analysis of the Directors’ personal arrangements was necessary to ensure that there were no valuable features or safeguarded benefits included in the plans, such as Guaranteed Annuity Rates, which would be lost upon transfer to a Small Self-Administered Scheme.
Right for you?
Clearly the situation can be complex and there are many issues to consider while weighing up the benefits. Strategic financial planning should be undertaken by a professional adviser to ensure all of the Directors’ short- and longer-term requirements are catered for.
Other factors that need to be closely scrutinised by a professional adviser include liquidity issues — i.e. there is no point tying up all of the liquidity in the pension scheme if someone is looking to crystallise their benefits and withdraw the Pension Commencement Lump Sum (often referred to as tax-free cash) in the near future.
But crucial caveats aside, buying property in pension schemes can be an effective financial solution in the right circumstances.
If you think it might be appropriate for you, we’re happy to initially discuss your options in comfort at our office — at a cost-free, no-obligation meeting.
Contact your usual Chancellor adviser or call 01204 526846 to chat about pensions and property
The contents of this article are for information purposes only and do not constitute individual advice.