The number of clients contributing £60,000 to their SIPP has increased 61% since the annual allowance was raised in the 2023/24 tax year, according to new data from investment platform Hargreaves Lansdown.
The number of Hargreaves Lansdown clients contributing over £60,000 to their SIPP has also risen 73% since the annual allowance was increased from £40,000 to £60,000.
The Money Purchase Annual Allowance was also increased to £10,000 during the 2023/24 tax year and has led a 39% increase in the number of clients contributing exactly £10,000 to their SIPP.
The Money Purchase Annual Allowance affects people who have previously accessed their pension flexibly over their tax-free cash allowance but want to contribute to their SIPP. The number of Hargreaves Lansdown clients using the Money Purchase Annual Allowance has risen 40% since 2023/24.
The number of SIPP clients contributing exactly £3,600 rose 11%. This could be due to clients contributing to the SIPP of a non-working partner or child.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said the data demonstrated the value of carry forward.
She said: “Since the annual allowance was increased from £40,000 to £60,000 in 2023/24, we’ve seen a 61% surge in the number of clients making use of it and contributing exactly £60,000.
“There are also signs they are looking to sweep up any remaining allowances from previous tax years with the number of people contributing more than £60,000 surging 73% over the same period. This is what’s known as carry forward and enables you to make use of unused allowances from the previous three tax years.
“If you were making use of carry forward this tax year you can potentially contribute up to £220,000 to your SIPP on the proviso that you earn at least this amount. It’s a hugely valuable tool for retirement.”
She added that with changes to salary sacrifice set to come into force from 2029, many SIPP savers will be looking to make the most of their allowances now.