The new Pension Advice Allowance, first announced at Autumn Statement 2016, will enable people to withdraw £500 up to three occasions from their pension pots tax-free to put towards the cost of pensions and retirement advice from April 2017.
Following an 8 week consultation, the Economic Secretary to the Treasury, Simon Kirby, has today confirmed that the £500 allowance:
Pension providers will be able to offer the allowance to their members from April 2017.
Research has found that when approaching retirement only 22% of people know the value of their pension pot and only 14% of people would be confident planning their retirement goals without financial advice.
According to Unbiased, UK savers with a pension pot of £100,000 save an average of £98 more every month and receive an additional income of £3,654 every year of their retirement if they take financial advice.
Economic Secretary to the Treasury, Simon Kirby, said:
Pensions and savings decisions are some of the most important a person will make during their lifetime.
This allowance will help people get the vital financial help they need to plan for their retirement.
The government has published a response to the consultation on introducing a Pensions Advice Allowance and HMRC will now conduct a 3 week technical consultation on the draft regulations.