An increase in capital gains tax (CGT) is top of mind for advisers, with the majority believing it is one of the most likely announcements in the upcoming Budget, research by Royal London has revealed.
In a survey, the life, pensions and investment mutual asked advisers their thoughts on the most talked about Budget in recent years.
Over three quarters (78%) said they believe CGT changes are the most likely outcome.
The research suggested 50% of advisers are predicting changes to pensions tax relief, followed by 38% who think the chancellor will introduce income tax on defined contribution death benefits for someone who dies before the age of 75.
Additionally, 25% are predicting a change to salary sacrifice for employer contributions.
At the other end of the spectrum, only 8% of respondents think the chancellor will make changes to Isa limits.
When asked what they would do if they were chancellor and had to save money on pensions, the responses varied from reducing tax relief on contributions (57%) to National Insurance changes (22%).
Notably, only 8% would reduce the level of tax-free cash to £100,000.
Just over a third of those questioned (36%) have been proactively contacting clients about the Budget.
Conversely, over 80% of advisers have seen an increase in the number of clients contacting them about taking action in relation to their pension.
That increase is significant for around a quarter of those Royal London surveyed.
Of those getting in touch, 94% of clients who had not taken any tax-free cash are asking about taking it all ahead of the Budget.
A smaller but still significant 40% of respondents have clients who had planned to take tax-free cash in stages and move the rest to drawdown or an uncrystallised funds pension lump sum, but now want to take the full amount.
Meanwhile, 7% have asked about taking tax-free cash and buying an annuity.
While most advisers predict a change to CGT, they have seen a much smaller number of clients (41%) getting in touch to take action in relation to assets that might be subject to CGT.
Royal London director of policy Jamie Jenkins said: “Every fiscal event comes with its fair share of speculation, but this one is shaping up to be the most talked about Budget for years, with most commentators now expecting a range of tax changes to be announced.
“At this stage, most advisers are fully expecting changes that will affect their clients and the advice they provide to them, but the speculation is shifting on a daily basis, leaving advisers in a difficult position.
“Meantime, it’s clear that clients are getting anxious about possible changes that may affect their finances, and some are bringing forward elements of their retirement plans.”
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