Hargreaves Lansdown has reported a last minute surge amongst SIPP holders to utilise their allowances before the end of the tax year.
On several days the firm was experiencing pension top-ups every few 11 seconds or so, it says, with a digital top up made every 20 seconds in the last hour of the tax year.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said the last-minute surge of activity, was last minute dash by SIPP holders “to make the most of their allowances before tax year end.
She said: “It’s clear that people used the long Easter weekend to work out how much of their allowances they had left and started the new working week ready to use them. The 2023/24 tax year was the first where people could make use of the £60,000 annual allowance. A higher rate taxpayer would find their £60,000 pension contribution had only cost them £36,000.”
Morrisey pointed out that for those who hadn’t topped up their SIPP in recent years, there was the potential to put in up to £180,000 through the use of carry forward.
Entering the new tax year, she added, “the door opens on a whole new set of opportunities for people to supercharge their pension. The annual allowance sits at £60,000, and those who have previously flexibly accessed their pensions have an allowance of £10,000.
“Again, those who have not made use of their annual allowance in recent years have the opportunity to turbo charge their contributions through carry forward, using unused allowances from the three previous tax years, as well as the current one. This puts the current maximum contribution at a whopping £200,000 for those able to take advantage of it.
“This new tax year also sees the abolition of the much-criticised lifetime allowance. This will bring further flexibility to people’s retirement planning – although the final rules are yet to be set in stone. People navigating this situation should consider getting financial advice to make sure they don’t do anything that may come back to bite them once the situation has been clarified.”
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