Pension changes - what pension changes?

Wealthy Britons are burying their heads in the sand over April's changes to pension tax relief according to new research from HSBC.  Around half of all respondents (47%) said they won't be impacted by the changes, despite figures suggesting that many of Britain's top earners will be hit by the little-publicised reduction of pension tax relief allowances.

On April 6th, the annual amount that can be saved into a pension and attract tax relief falls from £255,000 to £50,000.  Estimates suggest that around 100,000 Britons will be hit by the changes - 80% of whom earn more than £100,000 a year.

Yet despite this, most wealthy Britons say they are not worried - or do not know - about the changes which could have a serious effect on their retirement income.

The research, previewed in advance of HSBC's ‘The Future of Retirement Report', found that 11% of respondents were very worried about the changes, with a further 23% slightly worried.  Interestingly, 35% of all those surveyed said they were not worried about the changes because they would not affect them, and 12% had not thought about the planned changes.

However, when the results are split down to income brackets, 39% of those in the higher income bracket said they were not worried about the change because it would not affect them.  In addition, 12% said they knew nothing of the new limits and 9% admitted they had not even thought about the changes.

Worryingly, around 60% of those most likely to be affected by the cut either don't know or don't care.  As the research also found that only 28% of higher income respondents bother to check how much they can expect their retirement income will be more than once a year, the frightening conclusion is that many are simply burying their heads in the sand.

David Wells, Head of Investments at HSBC, said: "These tax changes will impact a great many people and we are urging those people to seek professional advice.  Retirement saving is a complex but important issue, and these new rules make matters even more so.  By seeking advice, you could avoid unwittingly breaching the rules and facing a hefty tax liability, but more importantly if you plan how you can put aside money now, you can really benefit greatly in the future."