Personal Pension  

Advisers asked ‘to do the impossible’ on annual allowances

Simon West, managing director at Norfolk-based Hulbert West, said that the issue was a practical one more than anything else, with not all earners knowing how much or when they will get paid.

“It creates problems for people in knowing how to act. For advisers, it compresses all of these reviews until the last month of the year.

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“It may push people more towards VCTs, but changes have made them more risky, so it is not always appropriate. High earners may look outside pensions to save.

“This is effectively an anti-forestalling measure. You can’t effectively plan because of the nature of the changes. They are looking at the revenue effects rather than the effects on real people.”

Pensions escaped relatively untouched in the Budget held yesterday, although a new lifetime Isa was unveiled, designed to help people under the age of 40 save for retirement or buy their first home.

Up to £4,000 can be saved each year and savers will receive a 25 per cent bonus from the government on the amount they save, but industry figures have criticised the new savings product.