Old Mutual Wealth (OMW) is launching a pension planning calculator to help advisers deal with the complex challenges to the pension annual allowance.
The tool will launch ahead of the tax year end in April, with a planned roll out to adviser through February and March.
Changes made in the Summer Budget in 2015 by then Chancellor George Osborne meant that for those earning an adjusted income of over £150,000 and a threshold income of over £110,000 the pensions annual allowance would be reduced.
For every £1 of adjusted income over £150,000 an individual loses 50p of their annual allowance.
The taper legislation came into effect from April last year, and so the upcoming 2016/2017 tax year end will be the first year that advisers will have to consider the change.
The tool, which takes into account the rules around defining adjusted and threshold income as well as any carry forward allowances available, aims to help advisers calculate the maximum pension funding opportunity for their clients affected by the change.
OMW managing director of UK distribution Scott Goodsir said that the company wanted to build a product that automated the calculation process for advisers, allowing them to use that time to focus on client engagement.
“Taking advantage of the annual pensions allowance is crucial to good financial planning, allowing clients to maximise their long-term savings capacity and ensuring they don’t forgo the opportunity to fund using carry-forward.
“Under the new taper this is especially important since the maximum allowance is so severely curbed for higher earners.”
