A lack of awareness of the benefits of SIPPs following the A-Day changes could hinder providers and harm consumers according to Fidelity FundsNetwork.
The fund supermarket says the popularity of SIPPs as the personal pension of choice for the mass affluent appears to be growing.
However, in a survey of 129 advisers, less than half felt investors were aware of the benefits of SIPPs such as the improved contribution limits and increased flexibility for income drawdown.
While almost a quarter (22%) of advisers felt there was little awareness among investors about the opportunities now open to them, over a third (34%) were more positive, stating their clients were keen to find out more once they understood the potential.
David Dalton-Brown, head of FundsNetwork says: “A-Day brought significant positive changes both in the form of increased contribution limits, and increased control of how benefits can be taken.
“But while we’ve seen the take-up of SIPPs more than double over the last year, there could still be a large proportion of people who aren’t making full use of the additional benefits that SIPPs now offer – particularly higher rate tax payers.
“Pensions always offered tax breaks on contributions and on the growth within the fund – fundamentally none of that has changed - but the previous disincentives have largely been addressed post A-Day with improved contribution limits and enhanced flexibility on uplifting benefits. Now, for many, pensions have become a lot more attractive.”
Dalton-Brown says there are an unprecedented number of people eligible to receive the benefits brought about by A-Day changes.
“There are currently around 3.25 million high rate taxpayers currently in the UK who pay around £69bn in tax,” he adds.
“After all of the hype surrounding A-Day, it is a shame to think that some investors could be missing out on this opportunity due to lack of awareness and education.”
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