A yr on for the reason that enhance within the pensions’ annual allowance, the vast majority of HNWIs (56%) are usually not utilising the additional £20,000 allowance accessible to them, new knowledge from the Saltus Wealth Index Report has revealed.

The analysis additionally revealed that pension pots of these nearing retirement are presently greater than £100,000 in need of the place they need to be to fulfill the revenue they need in retirement.

In April 2023, the annual allowance – the quantity it can save you right into a pension pot every year earlier than paying tax – elevated from £40,000 to £60,000.

Some 42% of HNWIs stated then they deliberate to contribute the complete £60,000, however solely a 3rd have contributed greater than £40,000 and simply 8% greater than £50,000.

Components reminiscent of the price of dwelling disaster and supporting relations, have meant pension contributions are usually not being prioritised. 13% of respondents stated they have been lowering pension contributions as a direct results of rising prices. In the meantime 10% of these with grownup kids (and 15% of these with grownup grandchildren) stated they’ve diminished their very own pension contributions particularly to fund monetary help for youthful generations.

Practically a 3rd of HNWIs (27%) stated they’re contributing above the earlier annual allowance – including between £40,000 and £50,000 into their pension this yr – but solely 8% are contributing as much as the utmost £60,000.

The common pension contribution for HNWIs is £35,400, up solely £1,600 from April 2023 the place common contributions (prior to extend in annual allowance) have been £33,800.

Moreover, the analysis exhibits the typical pension pot of HNWIs is £483,571 – greater than £50,000 in need of the £535,979 pot that will be mandatory to supply their desired degree of revenue. For these nearing retirement (respondents aged 55+) the shortfall is even bigger, at greater than £115,000.

Gianpaolo Mantini, Chartered Monetary Planner at Saltus, stated: “When the rise to the pensions’ annual allowance contribution got here into impact this time final yr, it’s one thing we might have anticipated to see most HNWIs taking advantage of. Nonetheless, they don’t seem to be.

“As a comparatively new change, I think the underutilisation could possibly be as a consequence of a lack of information in regards to the elevated allowance, and if individuals don’t know that it’s accessible, they might be sticking to the identical method for his or her pension that they’ve used for years.”

• The survey included 2,000 UK respondents (aged 18+) who’ve £250k+ of investable belongings. Analysis was carried out by Censuswide. The analysis was carried out on-line in December 2023.