New Allowance for Pension Advice
A new allowance which will enable people to access pensions advice in a tax efficient way will commence in April 2017.
Under existing rules, if you require advice regarding pensions you will normally have to pay a fee to a Financial Adviser. A new allowance being introduced in April will mean that you will be able to use funds saved in a defined contribution type pension fund to pay for the advice instead. The ability to access the advice in this manner essentially means that the cost of the advice is tax free.
The amount which can be accessed is £500. It can be accessed up to 3 different times provided it is in different tax years.
Be aware that the allowance can only be used to pay for regulated advice and cannot be used by those in final salary schemes unless they also have a defined contribution pension plan at the same time.
If you would like further information or would like to discuss your situation please contact our tax team.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.