Chancellor’s Pre-Budget report – what’s the opportunities?
There are whispers from inside some of the biggest product providers around tax relief threshold for pension contributions; the chat is that the threshold could be reduced from £150k to £100k as early as next April.
Who knows whether this will happen or not but we will highlight any marketing opportunities for financial adviser firms that arise as a result of what is said this week.
Remember, the government is seeking to halve the national debt in only four years. To do this it will have to put in place plans to raise enough cash to meet this target.
Spending cuts, reducing the number of senior civil servants by 20% and selling off government property are all on the agenda. Will there be a further erosion of tax exemptions on pensions?
You only have to look at this year’s Budget to see this is a real possibility. The April Budget, broke the link between income tax rates and marginal pension tax relief for those with income over £150,000. There remains a suspicion the Government is intending to do something else to unravel the pension deal – particularly aimed at the richest segments of society.
- Could it be reducing the tax relief threshold for pension contributions from £150,000 to £100,000 and bringing it forward a year?
- Could it be limiting tax relief on investment income for either very large pots or for high earners?
- Could it be capping tax-free cash sums at £100,000 and increasing national insurance contributions for high earners?
It all brings in uncertainty as people begin to think, ‘what will the Government do next to my pensions and investments savings? Particularly for:
- company directors,
- professional connections,
- high earners,
- anyone with a large pension pot or
- other high net worth individuals.
Commentators are saying this is dismantling the A-day principle’ of ‘simplification’. Complication dilutes the savings message at a time when, as we’re all living longer, we need to do something about it.
This creates a need for good quality advice. We’ll be covering the PBR later this week and suggesting some marketing, lead generation and communications ideas for adviser firms as they arise.
PS
T4 has access to a marketing database of all of the high net worth individuals in the UK. If you would like to gain access to this list, free of charge for your area, please contact T4.
