More than 8 in 10 (83%) Financial Planners support a reform of the money purchase annual allowance (MPAA) because of the Coronavirus pandemic, a new survey said.

Of those polled by investment platform AJ Bell, 40% wanted the MPAA scrapped altogether.

A further 30% wanted the MPAA increased from £4,000 back to its previous level of £10,000, and 9% expressed support for temporarily not applying the annual allowance cut during the Coronavirus pandemic.

Tom Selby, senior analyst at AJ Bell, said: “Even before Covid-19 hit, the MPAA felt like an unfair punishment for savers whose only crime was accessing taxable income from their pension pot.

“During this crisis many more over 55s will be facing salary cuts or joblessness, while others will need to use their savings to help loved ones struggling to make ends meet. In such an environment, hitting people with a 90% annual allowance cut for taking even £1 of taxable income from their pension feels deeply unjust.

“During the early stages of lockdown 1-in-10 over 55s said they had accelerated plans to access their retirement pot, and many more are likely to consider doing this as the Government support for businesses is pulled back between now and October.

“While there are various easements to the MPAA the Government could consider to help hard-pressed savers, the simplest would be to scrap it altogether.

“This could then mark the beginning of a radical pensions reform agenda, with the aim of simplifying the unnecessarily complex tax rules savers have to navigate and encouraging more people to save for their financial future.”

A total of 292 advisers were surveyed after they dialled into AJ Bell’s ‘Off the Road’ webinar.