Less than a tenth (9%) of financial advisers believe the cut in National Insurance (NI) announced by chancellor Jeremy Hunt during the Spring Budget will lead to them investing more in pensions savings.
On 6 March, Hunt confirmed a 2p cut in NI, worth around £450 a year for someone on an average salary.
The cut, widely trailed in advance of the Budget and applying from 6 April, will cost the Treasury approximately £10bn a year.
According to figures from Evelyn Partners, those earning £20,000 will save £149 a year; those earning £30,000 will save £349 a year; and those earning £40,000 will save £549 a year.
Higher and additional rate taxpayers, meanwhile, would save £754 a year.
M&G Wealth said the majority (83%) of advisers do not see people using the extra cash from the NI cut to invest more in pensions savings.
M&G Wealth pensions and tax expert Les Cameron said: “The measures announced in the Spring Budget will put more money in the pockets of the working population and give people more options when it comes to saving for their future.
“However, our research shows that the cost-of-living crisis is taking its toll on people’s financial well-being.
“This poll shows that advisers have their finger on the pulse, with many expecting their clients to use the extra cash to boost their spending rather than saving power.”
Advisers were more positive regarding the introduction of a British Isa that was also made by Hunt during the Spring Budget.
Under two-thirds (64%) of advisers predict the British Isa will lead to an increase in savings.
The British Isa will come in the form of an extra £5,000 tax-free allowance to encourage UK retail investment. The existing Isa allowance is £20,000.
Cameron added: “The proposed introduction of the British Isa increases choice for savers but also adds further complexity. The majority of Isa savers subscribe less than £15,000 so the increase in the annual limit is likely to be most attractive to those in the £100,000-plus income bracket who are most likely to maximum-fund their Isas.
“For those looking to invest solely in the UK, the British Isa could prove a valuable addition to their investment portfolio as the wrapper of choice for UK investments, alongside other tax wrappers being used to invest in other regions.”
M&G Wealth obtained these figures from a webinar it hosted, attended by over 800 advisers following the Spring Budget.