The demand to scrap the LTA comes as increasing numbers of lifetime allowance (LTA) breaches are occurring, said Curtis Banks.
The poll of 75 Financial Planners by SIPP and SSAS provider Curtis Banks was taken during a recent Curtis Banks webinar.
In the 2011/12 tax year, prior to the LTA dropping for the first time on 6 April 2012, there were 940 cases of LTA breaches reported by providers on the accounting for tax year return, with the total value of the charges standing at £36m.
In the 2017/18 tax year, the latest year that statistics are available, there were 4,550 breaches recorded with a total value of £185m.
The lifetime allowance for 2020/21 is £1,073,100.
Financial Planner David Mills of Ridgeways (FP), said: “Removing the lifetime allowance would not only greatly simplify the UK’s pensions system for the consumer but importantly, would aid their engagement too. We have to get people to save for the long term and having a complex pension system is certainly not helping.
"It seems nonsensical that we punish people for having good investment returns, given that there’s already a limit on the amount of tax relief available on the money they have paid into their pension over the years. We believe that the lifetime allowance should be scrapped and wholeheartedly agree with the results of the poll issued by Curtis Banks following their webinar.”
Jessica List, pensions technical manager at Curtis Banks, said: “The number of clients affected by the lifetime allowance has increased dramatically in a short space of time, and multiple forms of protection have added complexity to the system. It’s unsurprising that the lifetime allowance is unpopular given the number of breaches; however, scrapping it altogether would be no small feat as it is tied to other pension rules which would have to be changed at the same time.
“The fear of the advisers I speak to is that the Government is unlikely to scrap the lifetime allowance in the short term as this would be seen as a tax break, at a time when it is trying to find ways to increase tax revenue. Scrapping the lifetime allowance could also have a knock-on effect of increasing the Government’s contribution tax relief bill if more people begin to contribute again with no lifetime allowance to consider, so it could be paired with less favourable counter-measures such as drastically reducing the annual allowance.”