From 6 April 2017 many will be able to withdraw £500 up to three occasions (but once in a tax year) from their pension pots tax free for pension and retirement advice.
The government want to encourage individuals to make good financial decisions to save for their future. Many at present are unable to afford fees of a Financial Advisor upfront and then may not continuously review their finances. They now have the opportunity to do so without the financial burden upfront.
The allowance:
- Can be used a total of three times, only once in a tax year, allowing people to access retirement advice at different stages of their lives, for example when first choosing pension or just prior to retirement
- Will be available at any age, allowing people of all ages to engage with retirement planning
- Can be redeemed against the cost of regulated financial advice, including ‘robo advice’ as well as traditional face-to-face advice
- Will be available to holders of “defined contribution” pensions and hybrid pensions with a defined contribution element, not “defined benefit” or final salary type schemes
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.’
