Since April 2017 it has been possible to withdraw £500 from pension pots (defined contribution or hybrid pension scheme savings with an element of defined contribution) in three separate tax years, to put towards the cost of this advice without incurring a tax charge.
This ‘Pension Advice Allowance’ was announced in the 2016 Budget and implemented in April 2017. It is part of a government initiative to give more people access to advice so that they can plan better for their retirement.
And it seems there is a genuine need for this support; with research from Citizens Advice suggesting that nearly half of people (49%) are worried they won’t have enough pension savings for a comfortable retirement.
The value of advice
While the cost might be a barrier to some in terms of taking financial advice, it can make a positive difference to the amount of retirement income you could receive.
Research has found that when approaching retirement only 22% of people know the value of their pension pot and only 14% of people would be confident planning their retirement goals without financial advice. The £500 allowance allows you access to retirement advice at different stage in life, eg; when first choosing pension or just prior to retirement.
The value of this advice should not be underestimated. UK savers with a pension pot of £100,000 save, on average, £98 more every month and receive an additional income of £3,654 every year of their retirement, if they take financial advice.
Contains public sector information licensed under the Open Government Licence v3.0.
Getting advice can help you get more from your money. If you’d like to discuss any aspect of your savings and investments please get in touch.
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