A New Pensions Advice Allowance
Posted on 16th February 2017 at 16:28
Have you heard? A new pensions advice allowance!
From April 2017 a new pensions advice allowance will come into action. The allowance will allow individuals nearing to retirement to take up to £1,500 out of their pension pots tax-free to put towards the cost of financial advice. The advice offered can relate about the pension but also other financial products that can help construct retirement income. For example, multiple pots or ISA savings.
The new allowance will not be taxed on withdrawal from the pension pot, no matter what the individual's income may be. Although the payment of the allowance must go straight to the adviser from the pension scheme. The allowance may be used alongside the tax exemption for the employer organised pension advice.
HM Treasury have published a response to a recent consultation on the introduction of the allowance confirming the allowance is available at any age and individuals are given three uses of the allowance in their lifetime, but only once per tax year.
Full guidance on this new allowance is expected to be published by HMRC in the spring.
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