There is to be a rush to review retirement savings plans following Chancellor Jeremy Hunt's game-changing Spring Budget, says the CEO of one of the world's largest independent financial advisory, asset management and fintech organisations.
The comments from Nigel Green of deVere Group follow Mr Hunt's first full Budget as Chancellor in the House of Commons on Wednesday.
He says: "The Chancellor Jeremy Hunt delivered a Budget that is going to considerably ease the pension tension by abolishing the Lifetime allowance (LTA)."
The lifetime allowance is the maximum people can contribute to a pension – it was £1.07m before facing tax charges. The LTA was originally set at £1.5m when it was introduced in 2006. It steadily increased to £1.8m in 2010 but fell to £1m in 2016.
"Following years of successive cuts and stagnation, the Budget announcement is a game-changer.
"We welcome the scrapping of the LTA, which discouraged individuals to save for retirement.
"This development serves as an incentive to save as much as possible for retirement, as well as encouraging older people to return to the workforce, thereby boosting Britain's chances of long-term economic prosperity.
"It also highlights that retirement finances are increasingly a personal responsibility.
"It's becoming clearer that the government won't be able to support and provide for its citizens as it has done for generations before due to an ageing population and shrinking workforce; weaker economic growth; rising living, health and care costs; less generous company pensions if they exist at all; and the fact we're living longer, meaning that accumulated funds need to go further.
"As such, moves to encourage personal saving, such as abolishing the LTA, must be championed."
He goes on to add: "The Annual Allowance, which is the most a worker can save in their pension pots in a tax year before paying tax, has also gone up to £60,000 from £40,000. This will also incentivise saving for the future, which, again, must be applauded."
The deVere CEO concludes: "This landmark budget will prompt many individuals to rush to review their retirement savings plans – and not just in the years ahead, but also in this current financial year.
"We expect a huge surge in enquiries from clients as they sensibly reconsider their strategies to take advantage of the scrapping of the lifetime allowance."