Sipp contributions more than triple compared to last year

Sipp contributions more than trebled compared to the previous year, Fidelity International’s pension inflow figures showed. The company said this was due to concerns around the upcoming Budget.Compared to January 2016, total individual Sipp contributions doubled in February of this year with 41% of this increase seen in the last week of the month alone.Maike Currie, investment director for personal investing at Fidelity International, said: “It’s perfectly normal to see a spike in pension contributions as we near the end of the tax year but this year’s pension flows reveal that this trend has been brought forward."Chancellor George Osborne has binned plans to unleash further radical changes to the pensions systems, according to widespread national media reports at the weekend, though there has been no official Treasury comment either confirming or denying this.Mr Currie said: “With the Chancellor’s announcement called off for now, it will be interesting to see how consumers react and whether the strong momentum continues.“While George Osborne’s U-turn has taken away some of the urgency to maximise pension contributions before the Budget, this is a timely wake-up call for savers. The Chancellor has indicated pension tax-perks are in his sights – this is a postponement and not a cancellation of change.“The carry-forward clock keeps ticking despite the Chancellor’s change of heart. That means that for most people, the ability to take advantage of unused allowance from the 2012/13 tax year expires on 5 April.”Other pension experts agreed that Pension ISAs and reforms to tax relief are most likely to be postponed rather than axed.Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: “This does look like a stay of execution rather than a cancellation.”He said: “Investors, particularly those who pay higher rates of income tax, who want the certainty of benefiting from the pension tax system in its current form, should make the most of their allowances and opportunities while they still can. We may see a further consultation paper in the Budget, or we may simply get confirmation that plans have been put on hold.”Richard Parkin, head of pensions at Fidelity International, said: “The threat of radical change to pension tax relief appears to have receded for now but the problems identified in the Chancellor’s review and the subsequent national debate remain.“We expect this is action postponed rather than action abandoned.”

Sipp contributions more than triple compared to last year

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