Govt looks to introduce £500 pension advice allowance

Could use DC pension cash to fund advice

Helen Morrissey
clock • 1 min read

The government is to consult on introducing a £500 pension advice allowance to enable members to withdraw money from defined contribution (DC) pensions to fund financial advice.

Budget documents said the measures would apply to members up to the age of 55. They would be allowed to withdraw up to £500 tax-free from their scheme to redeem against the cost of advice. The exact age at which people can do this will be determined through consultation. This means that a basic rate taxpayer could save £100 on the cost of financial advice. The documentation also said it will increase the existing £150 income tax and National Insurance relief for employer arranged pension advice to £500.

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

 Rachel Vahey: Advisers and clients still need clarity on NMPA increase

Rachel Vahey: Advisers and clients still need clarity on NMPA increase

'HMRC has had years to clear this up but has sat on its hands'

Rachel Vahey
clock 11 March 2026 • 4 min read
Pension freedoms exposed a longevity problem we still refuse to confront

Pension freedoms exposed a longevity problem we still refuse to confront

'The gap between product complexity and consumer understanding is not narrowing'

Julia Fintz
clock 11 March 2026 • 4 min read
Complex Hartley Pensions administration continues amid 'misappropriated funds' investigation

Complex Hartley Pensions administration continues amid 'misappropriated funds' investigation

Administration expected to conclude in 2027

Isabel Baxter
clock 10 March 2026 • 3 min read