1 – Pre budget announcement rush for SIPP & SSAS contributions
“Virtually every commentator has predicted a reduction in tax relief for high earners. Mr Osborne has delayed the review of the numbers until 2016, but what will certainly happen is there will be a rush to pay large one-off contributions into SIPPs, SSASs and other pension products. Regardless of how early advisers discuss new contributions with clients and company accountants, there will inevitably be a last minute rush to open up new SIPPs and SSASs “overnight”.”
2 – Post budget announcement – increased pension contributions
“On the flip side, if the Chancellor increases tax reliefs for basic rate tax payers, this could lead to an increase in contributions to all types of pension products.”
3 - SIPP Capital adequacy could be £m’s
“September 1st 2016 is D-Day for SIPP providers up and down the UK; this change is hugely significant and will definitely give some owners of SIPP businesses a very large headache by way of the complexity of calculation and the capital holding required, which for some could be upwards of millions. The FCA themselves predicted some fall out with weaker providers potentially going to the wall.”
4 - SIPP provider consolidation
“Changes to capital adequacy could see further provider consolidation. Those wishing to sell their business before new capital rules arrive will seek a buyer who can be trusted to look after clients and of course provide them with a good price, but those looking to acquire will now require clear understanding of the increase in their capital position post purchase alongside the usual plethora of due diligence. A SIPP business carrying a 2016 capital requirement of, say, £500k must come to terms with the negative impact on the value of their business.”
5 – Review of Lifetime Allowance
“George Osborne may still have a few more rabbits to pull out of his hat and perhaps one that would be most welcomed would be a review of the ever decreasing Lifetime Allowance which seems remarkably complicated. Given the Annual Allowance has remained at £40,000 for a few years now, will he loosen the purse strings at the top end to encourage people to save for retirement and not be taxed to death when claiming their hard earned pensions?”
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