Middle income earners, including Special Savings Incentive Account (SSIA) holders, will be able to invest in property using the valuable tax breaks associated with pensions through a new offering launched on the market today.

Insurance company Standard Life has designed a new pension that it says will allow most retirement savers to purchase residential and commercial property in Ireland and the UK and take advantage of the tax relief on pensions contributions.

The ability to borrow to invest in property through a pension has been in place for the past two years, but in practice it has only been open to high net worth investors.

The Standard Life pension allows people to club together in syndicates of up to six people to buy property using their pooled pension funds, which they can start building with minimum contributions of just €175 a month.

The tax saving for an individual buying a €1 million property using a pension fund of €250,000 and additional borrowings is over €30,000 in the first year, based on the person paying tax at the top rate of 42 per cent, according to Standard Life.

Michael Leahy, chief executive of Standard Life Ireland, said many people had abandoned pensions in favour of property to fund their retirement. "By so doing, they have lost out on the attractive tax breaks pensions offer," he said.

The Standard Life pension is available to self-employed people, employees who are not members of an occupational scheme, people who have left occupational schemes and are transferring their funds and retiring people investing in approved retirement funds.

Employees who belong to an occupational scheme will be able to invest in the product using their additional voluntary contributions (AVCs) once Standard Life secures approval from the Pensions Board.