Self Invested Personal Pension (SIPP) scheme is a comparatively new development in the area of pension funds. Personal Pension schemes allow self employed persons and others to create a pension fund through their own contributions. Investing the funds is usually managed by an experienced third party such as an insurance company.

SIPP is a scheme that falls within Registered Pension Schemes under Section 150 of the Finance Act 2004 of UK. Under this scheme, subscribers can manage the investment of their pension funds themselves, investing in assets they choose and switching between assets. The investments should be in assets approved by HM Revenue & Customs (HMRC) and must be approved by an Independent Financial Advisor regulated by the Financial Services Authority (FSA).

Certain types of real estate investments have been so approved and qualify for investing the pension funds. These include Crown’s land products in the Cayman Islands. What it means is that investors can use their SIPP funds to buy land in approved Cayman projects, instead of using their free savings.

Using SIPP funds to buy land under these projects has one major advantage. Investors paying the full price can get an assured 6 percent return on their investment for a period of five years by giving the property developers an option to buy back the property during a period of five years. If the developers exercise this option, they will do so by paying you a price that is 20 percent over the price you paid.

Even if the option is exercised before the expiry of five years, you will get your five year return. In such a case, the developers will pay you a final compounded amount representing the unpaid returns for the remaining years.

Self Invested Personal Pension funds can be used for buying land plots in the elite Dubli Golf & Beach Resort project on the Grand Cayman Island.

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