Group self invested personal pensions are emulating flexible benefits in the 1990s.
Speaking at the CIPD Reward Forum, Philip Hutchinson, head of corporate Sipp sales, Pointon York Sipp Solutions, said: “Sipps is exactly where flex was 10 years ago. Everybody wants one but most people don’t understand how they work.”
However, more employers are using a ‘whole life’ model of financial products for employees, starting with debt management and working through to Sipps for employees with more sophisticated financial needs.
He said that: “The workforce today is a lot more financially mercenary than it used to be. There is a desire to plan financially for the future. Employees understand that the only person who has control over their financial future is themselves.”
Hutchinson sees bonus sacrifice is one of the most common ways that employees put money into a Sipp. Employees do this to maximise the tax breaks available on pension contributions.
Employee share schemes are also a key driver for the use of Sipps, due to the double tax break of rolling shares into a pension scheme.
“The one good thing for a Sipp is that if you are asset rich but cash poor then you can benefit,” he said.

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