Majority of IFAs support Budget pension changes – but warn of risk around banking on lifetime allowance removal remaining in the long run

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• Over two thirds (69%) of IFAs believe it would be risky for clients to plan around the lifetime allowance removal being in place in the long term
• Most IFAs are in favour of Budget pension changes
• Standard Life’s research outlines how uncertainty over future pension policy impacts advisers and clients

Financial advisers are fans of the various pension related changes announced in the March Budget but think it’s risky for clients to plan on certain measures remaining in place in the long-term, new research from Standard Life, part of Phoenix Group, finds.

The research, conducted among 203 IFAs, shows widespread support for the pension changes:

• Just over nine in ten (91%) are in favour of the increase of the money purchase annual allowance from £4,000 to £10,000, with 69% strongly supporting
• 86% approve of the increase of the annual pensions allowance from £40,000 to £60,000, with 59% strongly supporting
• Over three quarters (76%) support the removal of the pensions lifetime allowance (LTA), with 52% strongly supporting
• 74% support the changes to the tapered annual allowance, with 52% strongly supporting

IFAs think it’s risky for clients to bank on lifetime allowance removal remaining

However, with the Labour Party signalling it plans to reverse the removal of the pensions LTA if they come to power at the next General Election, over two thirds (69%) of IFAs believe it would be risky for clients to plan on this measure being in place long-term. This increases to 75% among those who have an average client portfolio of £200,000+. Overall, only 9% think it would be safe for clients to plan on it being in place in future.

Chris Hudson, Retail Advised Managing Director at Standard Life, commented: “The pension changes announced in this year’s Budget have proven to be popular among financial advisers, however there is clearly less confidence about their long-term future. The removal of the LTA has become a political hot potato with Labour signaling it’ll reverse the decision if it comes to power. As a result, not only are advisers having to get their heads around the implications of the LTA removal for their clients, but they are also second guessing whether it’s worth making financial plans now for something that may change in near future. The uncertainty around future policy could lead to advisers and clients making poor decisions, and this is incredibly concerning especially with the advent of consumer duty.”

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Notes to editors:

Opinium conducted research among 203 Independent Financial Advisers from 31st March to 4th April 2023

About Standard Life

• Standard Life is a brand that has been trusted to look after peoples' life savings for nearly 200 years
• Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers' pension scheme.
• Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We're proud to be building on nearly 200 years of Standard Life heritage together
• Our products include a variety of Pensions, Bonds and Retirement options to suit people's needs, helping our customers to invest and save for their future. We're proud to offer a leading range of sustainable and responsible investment options.
• We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about
• The value of investments can go down as well as up and may be worth less than originally invested.