SCRAPPING LIFETIME ALLOWANCE TOPS ADVISERS BUDGET WISH LIST

  • Nearly six out of 10 want lifetime allowance abolished to reflect DB transfer values
  • Around one in three would support means testing for retirement benefits
  • But Momentum research shows advisers believe Brexit uncertainty will not hurt SIPP customers

Scrapping the lifetime allowance tops advisers wish lists in this week’s Budget, new adviser research from pension specialist and SIPP provider Momentum Pensions shows.

Its nationwide study found 60% of advisers believe the £1 million limit should be abolished to reflect the impact of progressively larger funds being achieved and taking into account where there are transfers from defined benefit pension transfers, where deemed suitable.

The Treasury has previously pledged to increase the current £1 million lifetime allowance in line with CPI inflation from April next year but there is growing speculation the rise could be reversed along with claims the annual allowance could be cut to £30,000.

Momentum Pensions research with advisers shows around a third (32%) would support moves to means-test retirement benefits such as the Winter Fuel Allowance if the Chancellor needs to raise money and 17% would back ending the triple lock on the State Pension.

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But moves to limit pensions tax relief would be unpopular – just 3% of advisers would support the introduction of a standardised 30% tax relief on contributions.

There is some good news for the Chancellor – more than two out of three advisers believe Brexit will be positive for or have no impact on SIPP clients.

Momentum, which has expanded the investment choices available to advisers and their clients in its SIPP to include Passive funds and options which offer guaranteed income, believes the DB transfer market needs clarity on regulation but that a period of calm would be welcome for pensions in general.

John McCreadie, Head of Sales (UK), Momentum Pensions, said: “Abolishing the lifetime allowance would be popular with advisers but seems improbable.

“The Budget is expected to focus on the housing market and measures to attract younger voters so fundamental changes to pensions appear unlikely, which has the upside of being helpful for developing member understanding and giving a much needed period of stability in the industry but there is always the possibility of a surprise and the focus on the day will be the detailed announcements.

“Fast access to technical support is very important for advisers and Momentum is committed to updating its service to clients and advisers as soon as possible after the Chancellor sits down.”

Momentum Pensions has completely redesigned its SIPP range to ensure it provides a range of solutions to help with market requirements as they currently stand but also the more bespoke approach that is likely to be needed going forward in the transfer market (both DC and DB). It has combined with Vanguard to offer low cost passive fund solutions, can provide Sharia and Ethical options through other providers and access the only guaranteed income Trustee Investment Plan on the market through LV=, as well as having a link to the much used PruFunds.

Its Core SIPP aims to give advisers and clients a wide range of cost effective ways to purchase investments supported by Momentum’s best-practice approach to due diligence and governance.

Momentum has a pedigree in the SIPP market stretching back over 20 years and is established as a top 20 provider in the UK.

The Momentum SIPP Range is administered in Manchester and is backed by a highly skilled team with servicing and technical expertise, including property transactions, within the specialist pension market.

Research was conducted in September 2017 by PollRight with 102 advisers specialising in pensions planning.

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