Three quarters of advisers ‘wish’ for personal allowance increase in Spring Budget

Almost three quarters (71%) of advisers have said that they are hoping for an increase in the personal allowance as part of the Spring Budget, Royal London has found.

The UK’s largest life, pensions and investment mutual also revealed that in a survey of 89 advisers, almost half (46%) said they 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.

The second most popular choice, which was selected by 40% of advisers, was an income tax cut. 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.

Royal London said that 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.

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.

Despite there being rumours around a further reduction in national insurance, just 13% of advisers are hoping that will happen when the Budget is announced on Wednesday.

Furthermore, just over half said they would like to see new thresholds introduced on inheritance tax (IHT), with a small number (17%) hoping 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.

Director of policy at Royal London, Jamie Jenkins, 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."

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