There have been concerns expressed regarding the amount of time available for carrying out the necessary changes to scheme administration and processes in relation to the removal of the LTA, according to Sackers.
Sackers has released findings from its recent webinar survey in light of the Government’s plans to eliminate the lifetime allowance (LTA) starting April 6, 2024. The survey, which garnered over 200 responses, highlights concerns regarding the rapid implementation of these changes.
Among respondents, 28 per cent are worried about the limited time for essential updates to scheme administration and processes, given the ongoing legislation process in Parliament and anticipated HMRC guidance.
About 25 per cent of the respondents are also concerned about political uncertainty, particularly in light of the impending general election. Additionally, a third don’t know how to handle members considering retiring around LTA-Day and the impact of that on scheme benefit design, particularly if affected schemes don’t receive legislative assistance.
Sackers partner Eleanor Daplyn says: “In response to our question about which aspects of the LTA’s removal were causing most concern, 28 per cent of respondents identified the time available to make essential updates to scheme administration and processes. Given that the legislation is still making its way through Parliament, and further HMRC guidance is expected, this response hardly comes as a surprise. Time is clearly of the essence for clarifications now.
“Around the time of the 2023 Spring Budget Labour announced that were it to get into power it would reverse-engineer the tax changes. With a General Election looming this year, another natural area of disquiet is political uncertainty, with around a quarter of respondents highlighting this as an issue.
“Alongside the timetable and political backdrop, nearly a third of those who responded were also grappling with what to say to members considering retiring around LTA-Day and the potential knock-on effect on scheme benefit design. With no word yet on whether legislative help will be forthcoming for those schemes that have woven the LTA into their fabric, this unease is understandable.
“With less than 10 per cent of respondents feeling very confident of being LTA-Day ready, there is a lot to do in the countdown to April. Here’s hoping that the remaining jigsaw pieces are slotted together quickly.”
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