The Budget's new pension tax relief restrictions on those with paycheques of over £150,000 a year have already been imposed although these rules have been publicised by the Government as due for implementation in 2011, warns Hornbuckle Mitchell.

Independent Financial Advisers (IFA) must now review their clients' current and recent pension contribution activity, says the SIPP and income drawdown specialist.

Mary Stewart, director at the company, said: "The headlines the Government is promoting is that these changes are being made in 2011 but the reality is that the anti-forestalling measures are already in place, creating significant risks for advisers and clients right now. "We are writing to all our IFAs to make them aware of the implications and the need to review any client contributions they have just made or are in the process of making to ensure they are still appropriate and sensible."

Stewart added that industry experts' speculation that clients should maximise pension investments ahead of the change was ill-informed: "Unless someone had been making regular contributions at least quarterly before yesterday, they will only receive 40 per cent tax relief on the first £20,000 of any contributions made in the 2009/10 or 2010/11 tax year."

She said the Government was guilty of failing to understand the full implications of decisions to complicate tax relief rules. "It is frustrating that just as pensions administrators, IFAs and clients have begun to get used to some stability a whole new swathe of rules and complexities has been superimposed with implications that are not likely to be fully understood for months or years," she concluded.

- Pensions Age April 2009

Share Story: