AboutProperty.co.uk

Most people are unaware of pension reforms that will allow people to invest their pension in residential property, new research shows.

New rules allowing people to buy residential property as part of their pension plan come into force on April 6th next year - so-called "A-Day".

But research by IFA Promotion reveals that the majority of the public - 84 per cent - do not know what A-Day is.

Only one person in six identified the correct A-Day definition - 'a day when annuity and pension changes come in' - when asked to pick from a choice of five that also included Armistice Day, A-level results day and Armageddon.

The survey also reveals that two-thirds of those who are aware of the forthcoming pensions changes have no intention of reviewing their pensions arrangements before A-Day.

IFA Promotion's chief executive David Elms said: "This simple survey makes a forcible point: most people don't know pension reform is even happening, let alone what it might mean for them. As a result, millions could lose out by not reviewing their arrangements to take advantage of the changes."

Under the reforms, people with a self-invested pension plan (SIPP) will be able to invest in residential property both in the UK and overseas - tax-free.

Some experts are predicting that the number of people coming to the property market via pension funds could boost house prices by up to 15 per cent through increased competition for properties.

Nick Clark, managing director of the Property Investor and Homebuyer Show said: "This will benefit existing homeowners and property investors who could see their buy-to-let returns substantially increase as the market booms."

But given the potential complications involved, those considering investing in property as part of a SIPPs pension are being urged to make arrangements well before A-Day.

Mr Elms added: "While the changes are aimed at simplifying matters in the long-run, the immediate issue of how they affect each individual's current provision is not a simple one.

"An IFA who focuses on retirement saving advice is best placed to help you understand what steps you might need to take running up to April 6th 2006 and also how you might be able to take advantage of the new rules."

See IFA Promotion's interactive guide www.takepensionaction.co.uk for more information.