Sipp clients rushed to take advantage of the allowances on offer as the tax year came to a close, according to Hargreaves Lansdown.
The provider found there was a last minute surge of activity in its Sipps, with 4pm on April 5 being the busiest hour for digital Sipp top ups with one made every 11.3 seconds.
This was closely followed by 10am on April 2, where there was a top up every 11.76 seconds.
Activity remained high until the very end, 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: “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. This is the amount you can put into your pension and benefit from tax relief. A higher rate taxpayer would find their £60,000 pension contribution had only cost them £36,000.”
She also explained some had the ability to contribute up to £180,000 to their Sipp through carry forward.
But the usage of these allowances is dependent on annual earnings.
Morrissey explained: “Your annual allowance is pegged at whichever is the lowest of your annual earnings and £60,000. As tax year end approaches, people who may have variable income have a better idea of what their earnings are, so they can fund their Sipps accordingly.”
Going into the new tax year, there are more opportunities for people to boost their pensions.
“The annual allowance sits at £60,000, and those who have previously flexibly accessed their pensions have an allowance of £10,000,” Morrissey said.
“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.
“This is where you can use 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 year has also seen the abolition of the lifetime allowance which could bring further flexibility to people’s retirement planning. But the rules on this have still not been finalised.
amy.austin@ft.com
