Advisers support the new pension changes unveiled in the Spring Budget but warn that it is “risky” for clients to plan on certain measures remaining in place in the long-term, says Standard Life.
Research by the retirement specialist found 91% of advisers support the increase of the money purchase annual allowance from £4,000 to £10,000, while 86% approve of the annual increase of the pensions allowance from £40,000 to £60,000. Over three quarters (76%) are also in favour of removing the pensions lifetime allowance and 74% support the changes to the tapered annual allowance.
However, with Labour signalling that it plans to reverse the removal of the pensions lifetime allowance if they come to power in the next General Election, 69% of advisers believe it would be risky for clients to plan on this measure being in place long-term. This is particularly the case for advisers with an average client portfolio of over £200,000 (75%). In sharp contrast, just 9% believe it’s safe for clients to plan on it being in place in future.
Chris Hudson, retail advised managing director at Standard Life, said: “The pension changes announced in this year’s Budget have proven to be popular among financial advisers, however there is clearly less confidence about their long-term future.
“The removal of the LTA has become a political hot potato with Labour signalling it will reverse the decision if it comes to power. As a result, not only are advisers having to get their heads around the implications of the LTA removal for their clients, but they are also second guessing whether it’s worth making financial plans now for something that may change in near future. The uncertainty around future policy could lead to advisers and clients making poor decisions, and this is incredibly concerning especially with the advent of consumer duty.”
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