The Government has launched a consultation ‘Introducing a Pensions Advice Allowance: consultation’. This looks at allowing tax free draw down from pension schemes to cover the cost of financial advice.
It was announced at this year’s Budget that, as recommended by the Financial Advice Market Review (FAMR), the Government would consult on introducing a Pensions Advice Allowance:
- This would allow you to take £500 tax free from a defined contribution pension to redeem against the cost of financial advice.
- The tax-free amount would be in addition to the tax free lump sum available when benefits are ultimately taken.
- It would be available up to the age of 55.
The consultation sets out the preferred design for the allowance and invites comments on this and a number of policy questions. It runs until 25 October 2016.
Links
Our subscriber guide: Pensions: tax rules and planning
Consultation document: Introducing a Pensions Advice Allowance: consultation
