Pensions - Articles - Last minute SIPP surge as clients rush to use allowances


4pm on 5th April was the busiest hour for HL SIPP top ups in the run up to tax year end, with one top up every 11.3 seconds. This was closely followed by 10am on the 2nd April, where there was a top up every 11.76 seconds. In the last hour before tax year end, there was a SIPP top up every 20 seconds.

 This came as clients rushed to take full advantage of the allowances on offer. These include the ability to contribute up to £180,000 to a SIPP through carry forward.

 Helen Morrissey, head of retirement analysis at Hargreaves Lansdown: “There was a last-minute surge of activity, as HL SIPP holders dashed to make the most of their allowances before tax year end. 4pm on the 5th of April was the busiest hour for digital SIPP top ups, with one made every 11.3 seconds. This was closely followed by 10am on the 2nd of April, where there was a top up every 11.76 seconds. Activity remained high until the very end, with a digital top up made every 20 seconds in the last hour of the tax year.

 It’s clear that people used the long Easter weekend to work out how much of their allowances they had left and started the new working week ready to use them. The 2023/24 tax year was the first where people could make use of the £60,000 annual allowance. This is the amount you can put into your pension and benefit from tax relief. A higher rate taxpayer would find their £60,000 pension contribution had only cost them £36,000.

 For those who haven’t topped up their SIPP in recent years there was the potential to put in up to £180,000 through the use of carry forward. However, usage of these allowances is dependent on your annual earnings. For instance, your annual allowance is pegged at whichever is the lowest of your annual earnings and £60,000. As tax year end approaches, people who may have variable income have a better idea of what their earnings are, so they can fund their SIPPs accordingly.

 As we enter the new tax year, the door opens on a whole new set of opportunities for people to supercharge their pension. The annual allowance sits at £60,000, and those who have previously flexibly accessed their pensions have an allowance of £10,000. Again, those who have not made use of their annual allowance in recent years have the opportunity to turbo charge their contributions through carry forward. This is where you can use unused allowances from the three previous tax years, as well as the current one. This puts the current maximum contribution at a whopping £200,000 for those able to take advantage of it.

 This new tax year also sees the abolition of the much-criticised lifetime allowance. This will bring further flexibility to people’s retirement planning - although the final rules are yet to be set in stone. People navigating this situation should consider getting financial advice to make sure they don’t do anything that may come back to bite them once the situation has been clarified.”

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