The Labour Party appears strongly committed to its pledge to reverse the lifetime allowance (LTA) on pension savings leaving advisers and their clients open to uncertainty and risk, according to AJ Bell.
Head of policy development Rachel Vahey said Labour's repeat call this week to reverse chancellor Jeremy Hunt's abolition of LTA "feels very much like political posturing".
The Finance Bill 2023 is currently passing through parliament, with Labour having proposed amendments this week reflecting its stance on LTA. The changes to the bill - which is expected to receive Royal Assent imminently - outline an alternative approach that would only provide LTA changes for NHS doctors.
"This introduces uncertainty for advisers and their clients who are making decisions on how to take pension benefits. It's impossible to say today what the future holds and what changes will be introduced in future tax years by the current government," she said.
"Of course, this is only half the legislative story. The government has promised to abolish the LTA completely form the 2024/25 tax year onwards."
Vahey said advisers had been put in "an unbelievable situation" and had, along with clients, been placed in "the unenviable situation of being piggy in the middle of a political pensions spat".
Labour's calls to reverse the LTA cut came the day after its abolishment in this year's Spring Budget. Shadow chancellor Rachel Reeves called the choice "the wrong priority, at the wrong time, for the wrong people".
