However, a parallel ODPM proposal to raise the retirement age for council workers before the rest of the public sector could cause an exodus of local authority staff.
Chancellor Gordon Brown announced in his pre-Budget report on 10 December that he plans to allow cash in personal pensions to be invested in property. There is £28bn in such pensions at the moment and experts say the private housing sector can expect to benefit.
Another of his pre-Budget plans paved the way for property trusts. These could fund private homes for rent built by housing associations.
The two schemes might complement each other, so personal pension funds could be invested in the trusts.
Ian Fletcher, director of residential property at the British Property Federation, said: "These are two things we have been lobbying for."
The chancellor also proposed limiting the size of pension pay-outs to £1.4m.
This restriction is likely to affect people earning £80,000-£100,000 a year, a group that includes more than 50 chief executives of registered social landlords.
Paul McGlone, principal and actuary at Aon Consulting, said: "Anyone earning those amounts would be affected. Chief executives should certainly be making plans."
However, the ODPM's proposal to change the normal retirement age for council workers could lure staff away to other parts of the public sector, it was claimed this week.
The retirement age would be raised from 60 to 65. The move could apply to local government staff from 2005.
However, other parts of the public sector are not included; education, for instance, will not raise its retirement age until 2013.
Terry Edwards, assistant director for pensions at the Employers' Organisation for Local Government, said the changes could lead to staff moving from councils to the NHS, the police, or other public services.
Edwards said he wanted to see changes made simultaneously across the public sector to discourage any council staff exodus.
Source
Housing Today
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