A quarter (25%) of financial advisers wish for future government reforms that would lessen the tax burden on consumers saving for retirement.
This is according to NextWealth’s Managing Lifetime Wealth report, sponsored by Aegon.
The survey was conducted in anticipation of the upcoming General Election to determine advisers’ key priorities for the next government.
Under a fifth (17%) of advisers want the government to establish a more consistent approach to implementing and overseeing pension rules, including death benefits and the Lifetime Allowance.
Additionally, 12% highlighted the need for simpler rules surrounding retirement, investment and taxation.
Aegon pensions director Steven Cameron said: “It’s clear from our findings that to support their retirement clients, financial advisers want a future government to reduce the tax burden for consumers.
“The recently announced budget cuts in NI (National Insurance) by the current government will have been welcomed, but the question is what further reductions in tax might be delivered in future. While cutting NI rather than income tax preserves the generosity of pensions tax relief, it does not help those over state pension age who don’t pay NI.
“Advisers are also very mindful of the complexities of the current system. More simplification could help advisers explain current tax, pension and investment rules to their clients, while more consistency would improve their ability to advise on longer term financial planning.
“The future of the pensions Lifetime Allowance will be front of mind with the Labour Party stating it would reintroduce this in some form if in government.
“In light of the importance of longer-term planning for retirement, we urge all political parties to set out future policy proposals in their upcoming election manifestos. It’s vital that politicians avoid constant change or unnecessary disruption when it comes to planning for retirement.”
To obtain these results, NextWealth spoke to 200 financial advisers. This research was based on the views of both independent (88%) and restricted (13%) advisers.
State pensions have had 2 years of inflation-proof rises.
The fact that working people are saving NI contributions doesn’t mean Pensioners need more. It’s like renters wanting more because home owners get a reduction in council tax. The real problem is fiscal drag, which affects everyone.
“the generosity of pensions tax relief”
Really? Don’t forget that this is only borrowed money. The pension is taxed fully on payment.
If you want pensioners to be better off the solution isn’t that complicated. Just make the basic state pension tax free – anything above the basic is then taxed.