Financial advisers have reported a significant increase in the number of questions about the impact of a potential change in government from worried investors.
Nine in ten pension advisers (90%) report that clients have approached them in the last two years to discuss the potential impact that a change in government could have on their finances, according to a survey by Royal London. Similar numbers of advisers have raised the issue with clients.
Since the start of 2019, 54 per cent of advisers reported that the frequency of these conversations has either greatly (15 per cent) or slightly (39 per cent) increased.
The biggest concerns raised are estate planning and inheritance (64 per cent), potential changes to tax relief on pensions (65 per cent) and potential changes to income tax (57 per cent).
The survey found that a quarter (26 per cent) of advisers said their clients were raising this “often” with 10 per cent of advisers stating the topic comes up “all the time”.
The most common response to concerns over a potential change of government among advisers were: “take a long term view” (21 per cent), “wait until change has happened / base your financial plans on current legislation” (16 per cent), “don’t panic” (15 per cent), “diversify” (13 per cent) and “review your tax allowance (8 per cent)”.
Becky O’Connor, personal finance specialist for Royal London, said:
“Politicians are using big financial topics such as inheritance and pensions tax relief as policy footballs, so worried investors are wise to seek views from their advisers on whether this will affect their plans. With so much political uncertainty, the difficulty for advisers is knowing what to say. For the moment, ‘Keep calm and carry on’, is the most common line of defence.”
Notes to editors:
Royal London received responses from 535 pension advisers between 27 June and 7 July 2019.
For further information please contact:
Lucy Field, Press Officer
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About Royal London:
Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £139 billion, 8.6 million policies in force and 4,348 employees. Figures quoted are as at 30 June 2020.