Spring Budget wish list – most advisers would like to see an end to ‘fiscal drag’

Published  04 March 2024
   2 min read

Royal London, the UK’s largest life, pensions and investment mutual asked a snapshot of advisers for their wish list ahead of the spring Budget on Wednesday.

By far the most popular choice (71%) is an increase in the personal allowance. Around half (46%) of respondents are hoping to see an increase in the allowance to £15,000, while a third (34%) are looking for it to rise in line with inflation.  

An income tax cut was the second most popular choice, selected by 40% of advisers. When asked about how a change in income tax might be delivered, over two thirds (69%) who responded suggested raising thresholds was the best way to achieve this. 

All in all, it is clear that fiscal drag – where the freezing of allowances increases the amount of tax people pay – is a key concern among the advisers sampled. 

Increased ISA allowances came third in the wish list, with 35% of advisers hoping to see a change announced. If the allowances were increased, 69% would like to see this in the form of the headline annual subscription rate increasing with only 11% hoping that Lifetime ISA allowances would increase, with exit penalties decreasing.  

While rumours are swirling about a further reduction in National Insurance, it’s not a popular option among those advisers who responded, with only 13% hoping to see this happen. 

When asked if there was to be a change to Inheritance Tax (IHT) in the Budget, 56% would like to see new thresholds introduced and a comparatively small number (17%) would like to see it abolished entirely. When asked if the IHT nil rate band and the resident nil rate band should be combined to give one exempt threshold available to everyone, 53% agreed and would like to see a £500,000 threshold for all. Nearly a quarter of those asked (24%) would like to see the threshold set at £1m.  

Other findings include 46% of respondents who would like to see the pensions triple lock phased out in favour of something more affordable.  

Jamie Jenkins, director of policy at Royal London, said:  

"For the snapshot of advisers we polled, while there is support for reducing headline tax rates, it’s clear that they would rather see some easing of the fiscal drag caused by allowances being frozen or increasing slowly relative to income. Arguably, this is an issue that goes beyond simply taxation of income, affecting inheritance tax and working benefits such as the High Income Child Benefit Tax Charge."

For further information please contact:

Neil Cameron, PR Manager

Notes to editor

The Royal London research panel poll was open from Wednesday 28 February to Friday 1 March 2024 with 89 adviser respondents.   

About Royal London

Royal London is the largest mutual life, pensions and investment company in the UK, and in the top 30 mutuals globally, with assets under management of £162 billion, 8.6 million policies in force and over 4,200 employees. Figures quoted are as at 31 December 2023. Learn more at royallondon.com.