Pensions advice allowances to be extended

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Budget 2016: The £150 limit on income tax and national insurance (NI) relief on employer-arranged pensions advice is to be extended to £500.

In its Budget 2016 documentation, the government also confirmed that it is to consult on the introduction of a pensions advice allowance. This would allow pension scheme members under the age of 55 to withdraw up to £500 tax free from their defined contribution pension to redeem against the cost of financial advice.

The consultation will seek to determine the exact age at which people can do this.

The government will also consult on introducing a single, clear definition of financial advice to help remove regulatory uncertainty and ensure providers can offer the help consumers need.

These measures were first recommended in the Financial Advice Market Review, which was jointly undertaken by the Financial Conduct Authority and HM Treasury and published on 14 March.