Blog: Your £1,500 tax-free incentive to take pension advice

Pension savers have a financial incentive to help them make “some of the most important decisions during their lifetime”.

The Treasury has given people tax-free early access to their pension to pay for advice.

Savers can take £1,500 from a Defined Contribution (DC) scheme to pay for advice on what to do with the money in that pot.

The Pensions Advice Allowance (PAA) means savers can make three separate £500 withdrawals in a tax year from schemes with DC elements to pay for advice.

The rules state the Pension Advice Allowance:

• Can be used a total of three times, only once in a tax year, to allow savers to get advice at different times in their lives

• Will be available to savers of any age

• Can be used for regulated financial advice, include ‘robo advice’ and traditional face-to-face meetings

• Available to savers with pensions with DC sections but not final salary scheme

Clifton Wealth Chartered Financial Planner Emma Hall said: “It is a welcome move that the government is allowing clients to access an amount which is much more realistically going to cover advice costs.

“It’s vital that clients get the advice required to enable them to make an informed decision about their pension and retirement plans.”

Economic Secretary to the Treasury, Simon Kirby, said: “Pensions and savings decisions are some of the most important a person will make during their lifetime.

“This allowance will help people get the vital financial help they need to plan for their retirement.”

For more visit: https://www.gov.uk/government/news/savers-to-be-able-to-access-1500-tax-free-for-pension-advice