Home Business NewsBusiness Millionaire pension numbers fall by a third as government considers fresh freeze to lifetime allowance

Millionaire pension numbers fall by a third as government considers fresh freeze to lifetime allowance

by LLB Reporter
14th Nov 22 10:39 am

Britain has 1,000 fewer actively contributing personal pension millionaires following a period of global stock market volatility, latest annual figures show.

InvestingReviews.co.uk obtained the data following a Freedom of Information request (FOI) to HMRC.

The taxman revealed that overall millionaire numbers among those actively contributing to Relief at Source (RAS) schemes fell 37% last year from 2,700 to 1,700.

According to the data, there were 1,600 investors with personal pension pots worth £1m-£1,999,999, with the remaining millionaires sitting on pots worth £2m+.

The figures include the government backed NEST scheme, and Self Invested Personal Pension Schemes (SIPPS).

News of the collapse in pension wealth comes on the 10th anniversary of auto-enrolment, and amid reports that Chancellor Jeremy Hunt plans on freezing the pension lifetime allowance for two more years from 2025 to 2027.

According to the data released to InvestingReviews.co.uk, there are currently 1,100 taxpayers still paying into personal pension schemes despite their existing pots already exceeding the lifetime allowance of £1,073,100. This is less than half the number recorded last year (2,300).

The lifetime allowance is a limit on the overall amount you can save across your various pensions before facing additional tax charges. A 55% tax could be applied on any excess balance if a person takes it as a lump sum. Critics say few people understand how the lifetime allowance works.

Simon Jones, CEO of InvestingReviews.co.uk, said: “Pension pots have taken a hammering in recent times as global stock markets have gone into retreat. Even the wealthy are feeling the pinch.

“Investors with long-term investing horizons can take heart from the fact that, historically, markets have always rebounded.

“But it’s a different story for those who were hoping to retire in the near-term. Many will now either have to work a little longer, or develop alternative income streams to help them manage the squeeze.”

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