Pension tax modifications enhance enterprise for 49% of advisers

Almost half of Monetary Planners (49%) who provide retirement recommendation report that current pension tax allowance modifications have spurred a increase in demand for recommendation, based on a brand new research.

The modifications embody the abolition of the Lifetime Allowance and the rise within the Cash Buy Annual Allowance.

Regardless of the Finance Act printed on 27 November offering some readability on how the Lifetime Allowance (LTA) is being eliminated, recommendation round it continues to be to be fraught with issue because the Labour Get together initially stated it might reinstate the LTA if elected, based on the report from NextWealth.

Steven Cameron, pensions director at Aegon, stated he expects advisers to proceed to see elevated demand because the tax 12 months finish approaches.

He stated: “Some purchasers will wish to focus on if the elimination of the allowance means it is smart to pay additional contributions into their pension this tax 12 months. This might show very tax environment friendly though they should perceive that if already over the earlier lifetime allowance, they’re unlikely to accrue any extra tax-free lump sum entitlement.

“Others might want recommendation on the professionals and cons of crystallising their pots now, significantly if already above the lifetime allowance and with none protections. Whereas there is no such thing as a fast want to take action, significantly earlier than the tip of the tax 12 months, some could have considerations that an incoming Labour Authorities might reinstate the allowance, which means they’ve a restricted timeslot for crystallising with out dealing with a lifetime allowance cost.”

Areas of recommendation the place Aegon expects Planners to see elevated demand because of the brand new modifications embody:

  • Supporting these at or above the earlier allowance who had registered for defense earlier than 15 March 2023 to contemplate paying in extra contributions within the 2023/24 tax 12 months with out shedding protections.
  • Trying on the execs and cons of crystallising advantages this tax 12 months or forward of the Election for these at or above the earlier allowance with out safety.
  • Explaining the brand new tax-free lump sum allowances making use of on lump sums obtainable when advantages are taken and payable on loss of life.

• NextWealth surveyed 200 monetary advisers in November.


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