New pensions help may not reach those who need it most

Pensions advice allowance. It’s not the sexiest of phrases but, if all goes to the Government’s plan, this new proposal could help millions of pensioners. So, what’s it all about? Well, it goes back to George Osborne’s final Budget earlier this year. At the time, he said that the existing tax exemption for employer arranged advice would increase from £150 to £500. Yesterday the Treasury published a consultation document setting out plans for something else: a new pensions advice allowance. Under the proposals, consumers aged under 55 would be able to take £500 tax-free from their defined contribution pension to redeem against the cost of advice. According to Money Marketing magazine, the two measures together, which will come into effect from April, would give savers access to up to £1,000 of tax advantaged advice. And, in a further boon to pensioners, the Treasury is considering the use of the pension advice allowance more than once at different stages, such as retirement planning and long-term care costs.