April 6, 2007 was the first anniversary of A-Day, the radical reform of the UK pensions regime which aimed to simplify an overly complex pensions system and help boost retirement savings. On the evidence of the past 12 months, the reforms have found great success. “The A-Day changes have helped reinvigorate the pensions marketplace,” says Ian Price, Divisional Director of Pensions at St. James’s Place, which saw its pensions business rise by 96 per cent in 2006. “Changes to allowances and individual contribution limits have been well-received by clients and there is evidence that pensions savings rates have risen significantly in the past 12 months. There is evidence at the high net worth end of the marketplace that clients are taking advantage of the generous new contribution limits.”

The changes have certainly boosted the Self Invested Personal Pensions (SIPP) market – industry experts predict there will be 500,000 SIPPs in the UK by 2010, up from just 50,000 before A-Day. Ian Price, however believes there may be too much enthusiasm for SIPPs. “There is a concern that some clients are being directed into SIPPs, when they have no intention of ever using the wider powers of investment. Where a client doesn’t want to hold commercial property or buy specific shares, why should they pay for services they have no intention of using – they would be better served by having a Personal Pension or Stakeholder arrangement.”

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