Advisers are seeing more clients contribute to their pensions as a result of the changes to pensions rules, according to Fidelity Adviser Solutions’ latest IFA DNA study.
Following the Chancellor’s changes to pension rules in the Spring Budget, over two-fifths (43%) of advisers say their clients have been increasing pension contributions since the Spring Budget. In addition, 58% expect clients to increase contributions in the future.
In the study, 70% of advisers say the changes, including the removal of the pensions lifetime allowance and increases to the annual, tapered and money purchase annual allowances, will impact the advice they give to clients.
Elsewhere, more than eight in 10 (84%) advisers said the reduction in the Capital Gains Tax allowance will have the most significant impact on the advice they give, following the Chancellor’s decision to halve the CGT annual exemption from £12,300 to £6,000. This allowance is set to reduce further to £3,000 in April 2024. Meanwhile, the reduction of the additional-rate income tax threshold from £150,000 to £125,140 is expected to have less of an impact on client advice (54%).
Jackie Boylan, head of Fidelity Adviser Solutions, said: “The Spring Budget included some of the most significant changes we’ve seen to pensions policy in recent years, presenting many savers with an opportunity to reassess their retirement plans. With so many developments to navigate, advisers have a pivotal role to play in helping them to understand how to maximise their allowances and prepare for the future.”
With the Autumn Statement on the horizon, Boylan said there may be further developments coming.
“When it comes to wider pensions and savings policy, with the automatic enrolment extension bill recently receiving Royal Assent after clearing Parliament, pending changes will likely be significant. Questions will continue to be asked about the future of the triple lock and the Pensions Bill and we expect to know more following the King’s Speech at the State Opening of Parliament in early November. Clients will rely upon advisers to help them navigate through possible changes and keep their own retirement goals in sight,” Boylan added.
