Variety of ‘pension millionaires’ actively paying into pots falls

The variety of “pension millionaires” actively contributing to their pots has fallen, HM Income & Customs (HMRC) figures point out.

Some 1,700 individuals with funds of no less than £1 million have been paying into “reduction at supply” schemes in 2020-21.

This whole was considerably down from 2,700 in 2019-2020, in response to the figures obtained following a freedom of knowledge (FOI) request by InvestingReviews.co.uk.

HMRC warned that the figures are more likely to be incomplete and schemes usually are not required to incorporate people who find themselves not actively contributing to their pension when offering it with their knowledge.

Some individuals could now not be actively paying into their pension as a result of they’ve retired.

The pensions lifetime allowance for most individuals within the present tax 12 months is £1,073,100. The lifetime allowance is the restrict on how a lot individuals can construct up in pension advantages whereas nonetheless having the complete tax advantages, earlier than further prices kick in.

There have been 1,600 traders with private pension pots price no less than £1 million however lower than £2 million, in response to the newest figures, with the remaining millionaires sitting on pots price £2 million-plus.

The figures embrace the Authorities-backed Nest scheme, and Self Invested Private Pension Schemes (Sipps), InvestingReviews.co.uk mentioned.

In accordance with the newest knowledge, 1,100 taxpayers have been nonetheless paying into private pension schemes in 2020-21 regardless of their current pots already exceeding the lifetime allowance of £1,073,100. This was lower than half the quantity recorded the earlier 12 months (2,300).


Pension pots have taken a hammering in current instances as world inventory markets have gone into retreat. Even the rich are feeling the pinch

Simon Jones, InvestingReviews.co.uk

Simon Jones, chief govt of InvestingReviews.co.uk, mentioned: “Pension pots have taken a hammering in current instances as world inventory markets have gone into retreat. Even the rich are feeling the pinch.

“Buyers with long-term investing horizons can take coronary heart from the truth that, traditionally, markets have at all times rebounded.

“But it surely’s a unique story for many who have been hoping to retire within the close to time period. Many will now both need to work just a little longer, or develop various revenue streams to assist them handle the squeeze.”

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