Royal London 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.”
