Over two thirds (69%) of independent financial advisers (IFAs) think that it would be risky for clients to plan around the lifetime allowance (LTA) removal being in place in the long-term, according to research from Standard Life.
This was despite “widespread support” among IFAs for the pension changes announced in the Spring Budget, as more than three quarters (76%) of IFAs supported the removal of the pensions LTA, with 52% strongly supporting the changes.
In addition to this, over nine in 10 (91%) IFAs were in favour of the increase of the money purchase annual allowance from £4,000 to £10,000, with 69% strongly supporting the changes.
A further 86% approved of the increase of the annual pensions allowance from £40,000 to £60,000, while 74% supported the changes to the tapered annual allowance.
However, the research found that recent comments from Labour signalling plans to reverse the removal of the LTA have prompted concern, with over two thirds (69%) of IFAs suggesting that it would be risky for clients to plan on this measure being in place long-term.
This increased to 75% among those who have an average client portfolio of more than £200,000, with only 9% of respondents overall stating that they think it would be safe for clients to plan on it being in place in future.
Standard Life retail advised managing director, Chris Hudson, said: “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 signalling it will 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.”
This article first appeared on our sister title, Pensions Age.
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