The number of people contributing exactly £60,000 or over to their Hargreaves Lansdown SIPP increased by 12% in the last tax year”, according to the firm.
While the number of people making contributions in excess of the annual allowance increased by 34%.
This could indicate “more people are looking to mop up not only last year’s allowances but that left over from previous years through carry forward”, suggested Helen Morrissey, head of retirement analysis, Hargreaves Lansdown.
“The surge in contributions could be due to the removal of the lifetime allowance as well as the increase the annual allowance to £60,000 in recent years. This meant that in the last year someone making full use of carry forward could contribute up to £200,000 to their pension. Someone in the same position this tax year can contribute up to £220,000.”
The firm saw contributions of exactly £3,600 per year – the allowance available to non-earners so could be used to fund the SIPPs of non-working spouses and Junior SIPPs as well as regular savers – remain flat year on year, “but it remains enormously popular,” Morrissey said.
“Clients will often contribute this amount early in the tax year and then boost contributions further as their income allows. This can be a useful way for groups such as the self-employed with variable income to top up their pensions.
It is also the amount that can be contributed to the SIPP of a non-earning spouse or child, so can be the best way of boosting a family’s overall financial resilience if they have used up their own allowances and have some spare cash, she pointed out.
“It can really help a partner bridge the pension gap that can grow when home looking after children for instance.”
The market turbulence caused by President Trump’s tariffs did not daunt SIPP savers in the tail end of the tax year, Morrissey added.
“As yet, it’s too early to see how the situation plays out but it’s good to see so far people are keeping to their plan. Pensions are a long-term investment, and you need to take a long-term approach. Knee jerk reactions such as cutting contributions or making changes to investments risk crystallising losses which makes it harder for your fund to recover when markets do settle.”
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