There has been a surge in the search for high-end advice by affluent pensioners wanting to capitalise on high-income pension relief this quarter, Lee Goggin has said.
According to the founder of online wealth matching service FindaWealthmanager.com, which sets advisers up with high net-worth individuals, new advice requests over the summer have been motivated by the impending threat to higher-rate pension relief.
This perceived threat, Mr Goggin said, was caused by the announcement of a consultation on the issue in the government’s Summer Budget.
He said almost half of visits to the site over the past quarter had been from individuals looking for help in setting up or managing pension pots, compared to 30 per cent in the first quarter of 2015.
Mr Goggin added: “We were inundated with retirement-related enquiries over July and August and this shows no sign of slowing down as we have moved into September.
“Many of the pension-focused conversations we have with users indicate they are unsure of how best to take advantage of the new pension freedoms. What seems to have really got their attention, however, is the summer media coverage on a possible end to higher-rate reliefs.”
Currently, higher-rate taxpayers can earn a 40 per cent tax relief when putting money into a pension, so effectively save £1 for every 60p they contribute to their pension pot. This relief gives approximately 5m affluent individuals a £5,000 boost on average each year and, according to the Treasury, costs it some £35bn a year.
The future of the pension relief is expected to be decided upon in the 2015 Autumn statement.
Colin Parkin, managing director of Lincolnshire-based Ample Financial Services, said: “No one knows for sure what is going in the Autumn Statement, and we have not had any great influx of people seeking high-end advice since the pension freedoms were introduced because of any threat to high-income pension relief.
“Advisers need to exercise caution when talking about the future of income pension relief. If you jump the gun, that can have consequences as well, otherwise we could get another PPI situation, and it could be classed as mis-selling. Individuals need to make decisions for their own reasons.”