On the final question about retrospective punishments, when we look at historic precedents, pension savers were granted protections where their benefits exceeded the LTA as it was being reduced. That is not to say a Labour government could not take a different approach, but it is unfair to retrospectively punish those who are simply acting on the existing legislation.
We have clients who are at or above the LTA, and for whom it now makes sense to add to their pension pot.
The difficulty advisers face is that, although we must give advice based on current legislation, the risks of a Labour government reversing the changes and applying an LTA charge need to at least be considered.
Until the finer details emerge, timing is a crucial factor.
Individuals can exercise flexibility as to when they pay an excess charge, as it is the earlier of when you crystallise pension benefits in excess of the LTA or when you turn 75.
People may have deferred this charge over the years in the hope that the government would increase the LTA. Well, it seems that they may have got their wish, in the short term at least.
Our approach is to wait until the finance bill and Autumn Statement, due for November 22, before considering drastic action, when hopefully the government will provide some much-needed clarification around the transition to the complete removal of the LTA.
Rick Gosling is associate director and chartered financial planner at Five Wealth
