This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+Cover+small+181214
Categories:Pensions

Lower annual allowance is advisers' choice over relief cut

  • Print
  • Comment

The majority of advisers and clients would prefer to keep pension tax relief at the marginal rate and have a lower annual allowance than see the Government introduce a £40,000 annual allowance but cap relief at 40 per cent.

AJ Bell surveyed 300 advisers and 580 clients and found capping contributions at £35,000 with tax relief at the marginal rate and the penalty for exceeding the allowance set at 40 per cent was the most popular option.

More than 58 per cent of advisers prefer this to the Government’s plan, where the annual allowance charge would be set at varying rates depending on income. This is supported by 24 per cent of advisers while 17 per cent choose other alternatives and 1 per cent say the existing taper system should continue.

Fifty-five per cent of clients want the coalition to introduce the £35,000 allowance with marginal tax relief while 28 per cent say the Government should go ahead with its own plan, 14 per cent want another alternative and 3 per cent prefer the taper system.

Marketing director Billy MacKay says: “The Government proposal does not sit well with the majority of clients or advisers. While there are people who suggest that tax relief has its flaws as an incentive, a reduced annual allowance with tax relief at the marginal rate is by far the most popular choice.”

  • Print
  • Comment

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Money Marketing Awards 2015
Put your firm forward as the leading practitioner in your field. Adviser and Advertising categories are open to entries - Enter Now.

Have your sayEdit my profile/screen name

You must sign in to make a comment

AXA Wealth


Fund Data

Editor's Pick



Poll

Two years on from the RDR, do you think consumers are better off as a result?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments