Employers that may have been considering setting up a group self-invested personal pension (Sipp) with a residential property option will need to rethink plans following Gordon Brown's December pre-Budget report.
The chancellor has decided to close next April's planned pensions tax break on holding residential property and exotic investments such as fine wine, classic cars and art.
Mark Polson, head of corporate business at Scottish Life, said employers may find employee interest in group Sipps wanes now that residential property has been removed.
Polson added: "If you were going for a Sipp because you wanted to offer your employees the latest pension scheme, then fine, but make sure employees know what they can expect. Building in a new pension scheme is complex and comes at a huge cost to a business, and if employees cannot get what they want from this new scheme, there is no point."
Providers will also have to re-assess interest in group Sipp products following the chancellor's actions. Richard Meek, principle at Punter Southall, concluded: "The government were clearly unhappy with the idea of tax-efficient personal buying."