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

Government again rejects Waspi compensation after review

Government again rejects Waspi compensation after review

DWP: Creation of compensation scheme would be ‘highly impractical’ and ‘time-consuming’

Martin Richmond
clock 29 January 2026 • 3 min read
Pension transfers and the FCA: A well-meaning intervention that risks falling short

Pension transfers and the FCA: A well-meaning intervention that risks falling short

'The secret is giving people the right information at the right time'

Rachel Vahey
clock 28 January 2026 • 4 min read
State pension deferrals: 42,000 who postponed took benefit in 2023/24

State pension deferrals: 42,000 who postponed took benefit in 2023/24

FoI request from provider Royal London

Jenna Brown
clock 28 January 2026 • 3 min read