WARNING Act Now on End of Year Planning Given Extreme Delays at Pension Firms

As financial advisers, wealth, and tax planners, we are constantly involved in planning for clients around key dates such as the Budget, pivotal birthdays, annual and quarterly review dates and, more importantly, tax year end deadlines.

The UK tax year end is the 5^th April 2025.  Whilst this may seem far away to the ‘outsider’ and just under 3 months away, in pension planning terms it is just a couple of days/weeks away for us.  That’s right, we are urging you to make pension decisions now for the end of tax year 2024/25 and start of the new tax year 2025/26.

Why the ‘Act Now’ Warning?

In the run up to the Rachel Reeves’ first budget on 30 October 2024, there was huge speculation that the new Labour Government would reintroduce the lifetime allowance and potentially change tax free cash limits too.  There are still fears for this given the upcoming Spring Budget (March) or potentially an emergency Budget given the turmoil for UK government borrowing via the bond/gilt market.

• One pension company currently is quoting us an 8-10 weeks (nearly 3 months) turnaround time for paying pension lump sums (tax free cash in UK) having received over 30,000 applications in the run up to the October Budget and have taken on 47 new staff to deal with the backlog.  This means if you have requested a lump sum withdrawal it may not happen before 6^th April 2025.
• It appears to be a ‘standard’ now for many pension providers (including some well known ‘High Street Brands’) to be quoting 35 working day turnaround to do anything for us or answer simple questions about your policies.  That’s 7 weeks (over 2 months) turnaround for several pension providers.
• One pension provider has suffered a major systems outage, with the client data base corrupted and staff cannot currently access your client data/records (the data is not lost but the staff just cannot access it from their systems and have brought in external IT firms to fix their systems as fast they can.
• Our staff are also experiencing telephone line call queues (on hold) for up to 2 hrs for some firms that we deal with.

Comment

If you want or need anything doing with your pension funds or releasing lump sums or income before the end of the tax year, you need to act now.