A Sipps administrator has expressed disappointment that the lifetime allowance is to be cut from £1,250,000 to £1m.
There was speculation before the Budget today that Chancellor George Osborne could make this move and he has now confirmed the proposal to the House of Commons this afternoon.
Mattioli Woods was unhappy about the news, while deVere Group was heavily critical.
But Mr Osborne said that fewer than 4% of pension savers currently approaching retirement would be affected.
Mr Osborne said this move will save around £600m a year and from 2018 the Government would index the lifetime allowance.
He said: "I want to ensure those still building up their pension pots are protected from inflation, so from 2018 we will index the Lifetime Allowance."
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Alex Brown, senior wealth management consultant, Mattioli Woods, said: "As widely anticipated, the lifetime allowance has been reduced from £1.25M to £1M, which is a disappointing reduction when the government already has a cap on the maximum annual contributions.
"Whilst pension planning remains a core part of our client wealth planning, it now represents only one part of an investment philosophy, which we will continue to incorporate into all our client strategies. As details emerge, we would hope that adequate transitional provisions are made for those close to the new lifetime allowance."
The founder and chief executive of deVere Group, Nigel Green, said: "Another reduction in the lifetime allowance is scandalously counter-productive.
"This pre-election gimmick is a disincentive to save as much as possible for retirement– and therefore it could be harmful to Britain's long-term economic success.
"With the burgeoning pensions crisis and the looming care crisis, amongst many other factors, we need to urgently revitalise, promote and nurture a savings culture in the UK as a matter of priority. Continually cutting the LTA goes against this concept.
"This move is a slap in the face for those who have worked hard and saved hard, prudently putting money aside all their lives, in order to be able to enjoy their desired retirement. It is a nothing short of a dangerous cap on aspiration."
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Sipps firm unhappy over lifetime allowance cut
