By 
When pension freedoms were introduced in April 2015, few would have imagined that the controversial reforms would have led to Dorset’s answer to Jurassic Park. The rules mean over-55s can withdraw as much as they liked from their pension pots. There were fears that savers would burn through their retirement money too quickly. So far, that doesn’t seem to be a problem.
Rather than splurging, many pensioners are simply swapping one type of investment for another.
Steve Davies, 65, from Lyme Regis in Dorset, has been taking full advantage of the freedoms by pouring his money into an investment that is close to his heart. He has been using his pension to build Dinosaurland, his own fossil museum.
Since 2015, he has withdrawn more than £65,000 to spend on his fossil collection. “It’s my dream come true,” he said. “I’m so lucky I’m doing exactly what I want and these rules have helped with that.”
Dinosaurland has been running for 25 years and was set up with 130 specimens. Today it has more than 15,000 on permanent display.
Mr Davies built the museum from the ground up after leaving behind his career as a paleontologist, during which he worked for oil giant BP.
The museum has taken off since he started dipping into his pension, he said. In 2015, he took an initial lump sum of £25,000 to buy an ichthyosaur marine reptile from Germany. Since then, he has withdrawn £10,000 a year to purchase new fossils.
Under pension freedom rules, the first 25pc of any cash you withdraw is tax-free and the rest is taxed as if it were income.
The availability of his money has been a big help, Mr Davies said, as fossil collectors have to grasp opportunities at auctions quickly when they arise.
Six things you can do with your pension from 55
The museum has provided enough to live off comfortably, he said, which means he has not had to touch his pension for any income.
He said: “Having access to the money gives me responsibility to buy things that if I were being hard nosed about, I wouldn’t have bought. Last year I spent the full £10,000 on a mineral collection.
When the money goes into my museum it is lost money, in that it will be there until I die, but it makes my museum better and people who visit will enjoy these things.”
Mr Davies was also able to buy the premises of his museum through a self-invested personal pension (Sipp).
The building itself is part of the museum, he said, as it was a congregational church where pioneering fossil hunter Mary Anning was baptised in 1799.
Sean McCann, of financial adviser NFU Mutual, said Sipps allowed investment in a wider range of assets than traditional pensions, including farmland and commercial property.
He said: “A Sipp can borrow money to allow a larger property purchase. It’s also possible for a number of Sipp investors to own a property jointly. Many have used this flexibility to buy premises for their own businesses.”
Money Newsletter REFERRAL (Article)
However, investing your pension fund in this way is not for everyone, Mr McCann warned. As well as higher charges, having a large part of your retirement fund tied up in one property brings greater risk than diversified investment funds. This is not a problem for Mr Davies, who said the museum is his “entire life”.
After leaving BP, he transferred the building into the pension fund and has since paid an annual rent. This is covered by the income generated by the museum and means there is some money going back into the pension fund, which will help in his old age, he said.
There are two ways to invest in commercial property through a Sipp. One route is through equity release, where a business can put an already-owned premise into a Sipp. The second way, used by Mr Davies, involves the property being bought using the pension fund and directly put into the Sipp.
Comments