Advice allowance proposed for DC savers

The Treasury has published a consultation on improving access to retirement advice for pension investors. It sets out the government’s proposed design for implementing the pensions advice allowance for defined contribution pensions.

The allowance will enable savers to access a small part of their pension pot before age 55 as recommended by the Financial Advice Market Review . It will be paid tax free and in addition to the normal 25% tax free lump sum.

The consultation also discusses the proposal to extend the tax exemption of £150 for employer-arranged pensions advice to £500.

Tom McPhail head of retirement policy at Hargreaves Lansdown said the measures were ‘good news for consumers extending the ways in which they can access professional help as they approach retirement’.

But he warned that safeguards would be needed to counter fraudsters pretending to be financial advisers or investors splitting their...