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.

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