The Association of British Insurers is against aligning the pension input period with the tax year despite concerns over the impact the rule could have following the Government’s pension tax reforms.
Anxiety over the risk of exceeding the new £50,000 annual allowance limit as a result of Pips has been growing, forcing HMRC to issue a public clarification after it received “a number of queries” on how schemes can align the Pip with the tax year.
An ABI spokeswoman says: “We are against alignment of pension input periods. There is no evidence of consumer detriment with the current situation and transitional costs would be significant for the industry and very complicated for the consumer.”
Hargreaves Lansdown head of pensions research Tom McPhail says he had hoped the ABI would support an industry push for a rethink on Pips. He says: “The implications of not aligning the Pip to the tax year will create significant consumer detriment and complications. I would urge the ABI to have another look.”