Govt looks to introduce £500 pension advice allowance

Could use DC pension cash to fund advice

Helen Morrissey
clock • 1 min read

The government is to consult on introducing a £500 pension advice allowance to enable members to withdraw money from defined contribution (DC) pensions to fund financial advice.

Budget documents said the measures would apply to members up to the age of 55. They would be allowed to withdraw up to £500 tax-free from their scheme to redeem against the cost of advice. The exact age at which people can do this will be determined through consultation. This means that a basic rate taxpayer could save £100 on the cost of financial advice. The documentation also said it will increase the existing £150 income tax and National Insurance relief for employer arranged pension advice to £500.

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

Why waiving the right to tax-free cash is not a straightforward decision

Why waiving the right to tax-free cash is not a straightforward decision

Depends on a number of factors

Lisa Webster
clock 14 May 2026 • 3 min read
King's Speech has limited impact on pensions

King's Speech has limited impact on pensions

Pensions UK says there may be pension implications from other aspects of the legislative programme

Jonathan Stapleton
clock 13 May 2026 • 1 min read
Pensions and divorce: Where advisers can add the most value

Pensions and divorce: Where advisers can add the most value

'A pension is not simply another line on a balance sheet'

Tim Latham
clock 12 May 2026 • 4 min read