SIPP and SSAS provider body the Association of Member-Directed Pension Schemes (AMPS) has called on the DWP to announce a timetable for decisions over the future of its general levy.
AMPS said the lack of clarity over the consultation timetable was leading to business owners pausing decisions on the set up of SSAS schemes and impacting the SSAS administration sector’s growth.
In a consultation which closed on 13 November, the DWP asked for views on proposed changes to the structure and rates of the general levy on occupational and personal pension schemes.
The DWP set out three options for mitigating an ongoing deficit in levy funding:
Continue with the current levy rates and levy structure
Retain the current levy structure and increase rates by 6.5% p.a.
Increase rates by 4% pa and signal an additional premium rate for small schemes (with memberships up to 10,000) from 2026
Andrew Phipps, the chair of AMPS, said the body’s members expressed strong opposition to the consultation which proposed to increase the levy rates for schemes with less than 10,000 members, potentially including SSAS, by an additional £10,000 from 2026.
He said the increase could threaten the future of SSAS schemes, would be unfair and disproportionate to the small schemes sector and would discourage the use of SSAS as a flexible and cost effective pension vehicle for business owners and entrepreneurs.
Mr Phipps added that a lack of timetable was having an effect on the body’s members.
He said: “This consultation is having real world consequences for our members and their clients.
“There has been no timetable agreed and many of our members are seeing clients so concerned at the potential levy being applied to a SSAS that they are pausing the setting up of the pension, or looking to move the pension away from a SSAS which could have a material effect on the sector.
“We continue to urge the DWP to reconsider its approach and to engage with the industry to provide clarity and find a more reasonable and sustainable solution.”
AMPS has 120 member firms representing SIPP providers, SSAS practitioners, pension lawyers, software developers, banks and investment houses.