Changes to pension lump sums are the Budget measure that would cause the biggest disruption, according to a new poll of professional advisers conducted by Abrdn.

When asked what changes would cause the most issues, more than half (55 per cent) of respondents cited cutting the pension tax-free lump sum, even assuming reliefs would apply to protect those who had already exceeded the new level.

Respondents also raised concerns over the disruptive potential of increasing Capital Gains Tax rates, potentially towards income tax levels (40 per cent), and reducing the CGT or dividend annual allowance further (35 per cent).

In addition to this, just under a third (31 per cent) said removing the CGT exemption on death, while 23 per cent pointed to removing or reducing inhertitance tax reliefs.

Commenting on the findings, Abrdn head of savings policy, Alastair Black, said: “With the Budget looming and talks of potential changes to savings, investment and tax policy swirling, the stakes have never been higher.

“Any changes to policy can be disruptive, but it’s clear the sector is concerned that some will cause more fundamental disruption than others.

"We hope that, for any significant policy changes, the government will also include transitional reliefs to help manage the impact, as others have in the past, and provide some breathing room for adjustments in planning.”

Black also stressed the need for peace of mind, emphasising that, for advisers to provide that assurance, they must be confident in their business’s operational stability to weather any storm.

“This year has already presented advisers with relentless economic headwinds, political uncertainty and significant policy shifts, leading to capacity crunches that strain their operations," he added.

“Given the government’s desire to support growth in the economy it’s in their interests to support the advice sector – both in terms of growing that part of the economy and given that advisers encourage individuals to invest.”

This article originally appeared in our sister publication Pensions Age.

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