Investments  

Aegon criticised over tax year deadline for pensions

Aegon criticised over tax year deadline for pensions

Aegon has come under fire after changing the timeframe in which payments must be made into its legacy pension accounts to qualify for tax relief in the current tax year.

Scott Gallacher, an adviser at Rowley Tourton in Leicester, received an email from Aegon in which the insurer sets a deadline of eight days before the end of the tax year for making pension contributions from general investment accounts to the Cofunds pension account.

Tax year end is April 5 2019 and while most platforms allow payments to be made right up to the deadline or the day before, Aegon told clients it could not process payments into Cofunds pensions after March 26.

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Mr Gallacher said the deadline in practice would prevent some clients from topping up their accounts before the tax year end.

He said: "We are not really a 'last minute' firm but with the best will in the world one or two clients will always leave it until the last minute.

"Consequently Aegon are applying what I consider to be a very unhelpful deadline that is eight days before the end of the tax year. This is hardly supportive of clients and advisers."

By comparison, Nucleus' deadline for advisers wishing to do business on the platform is the final day of the tax year, while Zurich stated it was open until midnight on April 5, although the firm did recommend handing in all payments and paperwork by close of business on April 3 to "guarantee that payments are processed ahead of the deadline".

Life company Aviva also accepts Isa and pension contributions until close of business on April 4.

Philip Milton, who runs PJ Milton and Co, an advice firm in Devon, agreed the deadline was unhelpful.

He said: "We have clients last minute, often encouraged by ourselves from new information to hand. We try not to set any deadlines but clearly processing a £40,000 contribution on 5 April can be very testing."

Aegon's email to advisers states the "end to end process here is a little longer than in previous years" but it could not confirm how much longer it was.

A spokesman for Aegon said timings had been mutually agreed with Suffolk Life, the provider's partner in the provision of this product, but a spokesman for Suffolk Life denied this, stating Aegon had set deadlines of its "own choosing".

A spokesman for Aegon was asked to comment on Suffolk Life's claim it had chosen the earlier deadline.

The Aegon representative added the issue was not related to the replatforming of Cofunds clients onto the Aegon platform, a process that caused multiple problems for advisers throughout 2018.

He said: "The email was issued a month before tax year end. It is not linked to service issues or to any other issues.

"The experience from last tax year end is something we are mindful of and this gives extra time to help advisers.

"The email is intended to be accurate on timings. We set the deadline to make sure no one misses the deadline."