Hargreaves Lansdown has reported a rise in number of pension investors saving into SIPPs in the first few weeks of the tax year.
New figures from the investment platform show 3,715 Hargreaves Lansdown clients contributed £3,600 to their SIPP in the first two weeks of the new tax year; the maximum that can be paid into the pension of a non-earner. The figure marks a 16% increase on the same period of last year.
Hargreaves Lansdown said 245 people also contributed exactly £10,000 to their SIPP drawdown plan, making full use of the new money purchase annual allowance.
The platform notes that while pension savers tend to wait until close to the end of the tax year before making bigger contributions, the number of early bird savers has jumped 54% year-on-year.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “We are just weeks into the new tax year and yet people are already taking big steps towards making full use of their new pension allowances. A combination of rising investor confidence and tightened investment tax free allowances provides an improved backdrop for greater early bird activity.
“Enthusiasm for these allowances remains undimmed across the board. Over 3,700 clients contributed exactly £3,600 to their SIPP over this period. They could be people looking to make an early start on their own pensions or it could be people looking to boost their wider family financial planning by contributing the whole allowance given for a non-working spouse, child or grandchild.”
Morrissey said there are also “strong early signs” that those who needed to access their pensions early are now looking to rebuild them following the government’s decision to raise the money purchase annual allowance from £4,000 to £10,000 in the 2023 Budget.
“It has been a hugely popular move in helping people to rebuild if they retired early during the pandemic or had to access their pensions early to see them through the cost-of-living crisis. With allowances remaining frozen for so long the government’s decision to increase them for the 2023/24 tax year has proven powerful, especially when combined with the removal of the lifetime allowance,” she added.
“People are making full use of the ability to pile extra money into their pensions. With the full pension allowance including carry forward hitting £200,000 this year, we can expect increasing numbers to hit this magic mark over the coming months.”
