can be used a total of three times, only once in a tax year, allowing people to access retirement advice at different stages of their lives, for example when first choosing pension or just prior to retirement will be available at any age, allowing people of all ages to engage with retirement planning can be redeemed against the cost of regulated financial advice, including ‘robo advice’ as well as traditional face-to-face advice will be available to holders of “defined contribution” pensions and hybrid pensions with a defined contribution element, not “defined benefit” or final salary type schemes. can be combined with the £500 employer-arranged tax-free pensions advice. The use of one exemption does not prevent an individual from accessing the other
HMRC has published draft regulations and draft explanatory memorandum for a technical consultation. More information can be found in the tax information and impact note .
Comments on the drafts should be sent by email to pensions.policy@hmrc.gsi.gov.uk by 28 February 2017.
Interaction of the allowance with the tax exemption for employer arranged pensions advice From 6 April 2017 the government is also introducing a new income tax exemption to cover the first £500 worth of pensions advice provided to an employee in a tax year. It will allow advice not only on pensions, but also on the general financial and tax issues relating to pensions. The changes replace existing provisions which limited the exemption solely to pensions advice and was capped at £150 per employee per tax year. This tax exemption will be available for salary sacrifice arrangements between an employer and employee. Additionally, where an employer reimburses an employee for pension advice they have arranged, this will be covered by the exemption. It will be possible to combine this tax exemption with the Pensions Advice Allowance to enable individuals to access up to £1000 of tax advantaged financial advice. The use of one exemption does not prevent an individual from accessing the other.
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Consultation on security and sustainability of defined benefit pensions 27 February 2017
A review of the security and sustainability of defined benefit pension schemes in the private sector has been launched.
Member protection, funding and investment, scheme affordability and consolidation will be reviewed as part of the consultation. The government will also consider strengthened powers for The Pensions Regulator .
The green paper will be a wide ranging call for evidence from employers, the pensions industry and consumers.
Background Defined benefit schemes, many of which are also known as ‘final salary pensions’, are an important pillar of the UK economy and our pensions system. Currently, around 11 million members in the UK will rely on a defined benefit scheme for all or part of their retirement income and defined benefit pensions hold around £1.5 trillion of assets. Increased life expectancy, changes to working patterns and the economy mean that defined benefit schemes are operating in very different circumstances from when they first became popular. The purpose of the green paper The government is committed to a system that works for employers, schemes and the 11 million people who are in a defined benefit scheme. The green paper will consider the powers of The Pensions Regulator and encourage a debate about striking the right balance between the needs and aspirations of sponsoring employers, members, the Pension Protection Fund , and the wider economy to ensure that no one group is unfairly disadvantaged.
Minister for Pensions, Richard Harrington, said:
“People need to have confidence in their pension and it is vital that they feel that they are secure. With recent high profile cases highlighting the risks inherent in defined benefit pensions, we want to ensure that these important pension schemes remain sustainable for the future and that the right protections are in place for members.
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