Sipp provider Alliance Trust Savings has reported that clients have contributed 41% more to their Sipps in the year to date than they did over the same period in 2014.
The company believes that the pension freedoms and the political threat to the annual allowance have spurred a rush of investment in Sipps. The company has not released the actual figures for investment but says it was sharply up.
The company points out that in 2013/14 tax year the annual allowance was £50,000 but this reduced to £40,000 in the 2014/15 tax year. Despite this reduction in allowance contributions have increased significantly, says ATS.
Brian Davidson, senior pensions proposition manager, said: "The new Pension Freedoms have given pensions a new lease of life.
"Clients no longer feel trapped and this new flexibility has encouraged them to make more contributions to their Sipp. Clients are also fully aware that the pension annual allowance is a tax break that the political parties are willing to tweak to balance the books. There is growing acceptance that the existing annual allowance of £40,000 will inevitably fall irrespective of who resides at Number 10 and clients seem to be taking a view of use it or lose it."
Alliance Trust Savings is a provider of Sipps, Isas and Sharedealing Accounts. As at 31 March 2015, Alliance Trust Savings administered £7bn of assets.
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