The Pensions Policy Institute (PPI) has published “At-retirement financial advice in the workplace”, a report exploring employer reactions to two new initiatives being considered by the Treasury.
As you may be aware, the Treasury is currently considering:
• Increasing the tax exemption around employer-arranged pensions advice from £150 to £500
• Introducing a Pensions Advice Allowance which allows DC savers to withdraw up to £500 from their DC pension funds without incurring a tax penalty, provided that this amount is used to purchase pre-retirement advice
While employers indicated that their employees are not overly interested in pensions, they noted that employees become more engaged as they approach retirement. This suggests that employees would value employer-provided financial advice at this stage. Employers are very supportive of the Pensions Advice Allowance which would allow DC savers to withdraw up to £500 from their pension funds to pay for advice and indicated that they would promote this to their employees.
The £500 tax exemption for employer-provided advice was of most interest to those employers who already provided access to advice to their employees. However, it may be challenging to involve smaller employers, where there is no named person responsible for pensions, in the provision of financial advice in the workplace.
To view the Press Release and the full report, please use the address below.
At-retirement financial advice in the workplace report www.pensionspolicyinstitute.org.uk