The A-Day effect is far from over as advisers are predicting that clients’ pension contributions will increase over the next three years, says Skandia.
The firm’s survey of 500 advisers shows that 64 per cent predict clients’ pension contributions will increase over the next three years, a third forecast no change and 3 per cent predict a decrease.
Even though everyone can now fund up to 100 per cent of their earnings up to this year’s annual allowance of £225,000, 65 per cent of advisers in the survey say that most of their clients are only paying in 0-10 per cent of their earnings each year.
Skandia says this year signals a milestone for pensions with the basic tax relief available falling from 22 per cent to 20 per cent on April 6.
Head of pensions marketing Nick Bladen says: “What this data is suggesting is that the A-Day effect is far from over. More and more people are becoming aware of the opportunity offered by pensions – namely huge flexibility in investment strategy and significant tax relief.
“The pension rules offer many more options for people to make the most of these – either through regular or single premiums – and to make the most of the flexibility that is available, we expect to see single-premium funding become even more popular.”