The Association of Member-Directed Pension Schemes (AMPS), the industry body representing SIPP and SSAS providers, has called on the DWP to announce a timetable for the general levy consultation, concerned that SSAS administrators and advisers are kept in the dark.
The association said the lack of clarity over the consultation timetable is having real world consequences with business owners pausing decisions on the setting up of a SSAS, impacting the SSAS administration sector’s growth.
The DWP consultation closed on the 13 November 2023 and asked for views on proposed changes to the structure and rates of the General Levy on occupational and personal pension schemes. The consultation raised awareness of the ongoing deficit in levy funding and set out options for mitigating this over the next three tax years. There were three options:
- Option 1: Continue with the current levy rates and levy structure
- Option 2: Retain the current levy structure and increase rates by 6.5% p.a.
- Option 3: Increase rates by 4% p.a. and signal an additional premium rate for small schemes (with memberships up to 10,000) from 2026
Andrew Phipps, the chair of AMPS, said: “AMPS members expressed strong opposition to the DWPs consultation on the General Levy on pension schemes, which proposes to increase the levy rates for schemes with less than 10,000 members, potentially including SSAS, by an additional £10,000 from 2026. This would be unfair and disproportionate to the small schemes sector and would discourage the use of SSAS as a flexible and cost effective pension vehicle for business owners and entrepreneurs.
“This consultation is having real world consequences for our members and their clients. There has been no timetable agreed and many of our members are seeing clients so concerned at the potential levy being applied to a SSAS that they are pausing the setting up of the pension, or looking to move the pension away from a SSAS which could have a material effect on the sector. We continue to urge the DWP to reconsider its approach and to engage with the industry to provide clarity and find a more reasonable and sustainable solution.”
