More than half of financial advisers polled by Aegon would like to see chancellor Philip Hammond announce a relaxation in the lifetime allowance and annual allowance.
Aegon polled 85 advisers and found that 67 per cent would like to see new measures to stimulate economic growth in the Autumn Budget, while 55 per cent are asking for limited changes to create stability pre-Brexit.
When questioned on possible changes, most advisers support that there should be no radical changes to the current pensions tax relief approach, at least until Brexit is concluded and auto-enrolment is fully rolled out, to avoid creating savings uncertainty.
Some 44 per cent of respondents strongly agreed with this, with a further 34 per cent agreeing.
Several pension experts have warned on potential changes in the allowances in the next Budget.
It is predicted that the annual allowance - a limit on the amount that can be contributed to pensions each year, while still receiving tax relief – could be reduced from the current £40,000 to £30,000.
The government is also expected to reduce the tapered annual allowance, from £150,000 to £120,000.
The lifetime allowance represents the maximum amount of money a saver can save in their pension pot - and benefit from tax relief at their marginal rate - before incurring an additional tax charge of up to 55 per cent.
After the major U-turns on the obvious changes to national insurance and social care funding earlier this year, I expect that any attempt to raise taxes/cut relief will follow the previous path of being so complicated that people won’t really understand how it affects them.Steve CarlsonThis allowance, however, is set to increase from £30,000 to £1.03m next year, due to changes introduced in the 2015 Budget that now link it to inflation.
A large majority of advisers (77 per cent) also said the government needs to consult urgently on social care funding.
Earlier this month, it was rumoured that the government has put on hold its consultation on social care funding until next summer.
Aegon also asked advisers about the possible introduction of auto-enrolment for the self-employed and gig economy workers, with 59 per cent in favour and 22 per cent against.
According to Steven Cameron, pensions director at Aegon, the “chancellor has a difficult task ahead in deciding what to include, and what to avoid in his November Budget,” against “the backdrop of a critical stage in Brexit negotiations”.
He said: “From a pensions, savings and investment perspective, advisers are calling for limited change to offer as much stability as possible.
“They are strongly opposed to any radical reform of pension tax relief at least until Brexit is concluded and auto-enrolment fully rolled out, but there is a strong demand for relaxations in the lifetime and annual allowances.”
For Steve Carlson, chartered financial planner at Cardiff-based Carlson Wealth Management, “people need certainty in order to plan for their future”.
He said: “The prospect of further changes to pension tax relief and the uncertainty over social care costs makes that very difficult.
"After the major U-turns on the obvious changes to national insurance and social care funding earlier this year, I expect that any attempt to raise taxes/cut relief will follow the previous path of being so complicated that people won’t really understand how it affects them."
maria.espadinha@ft.com
