The government have revealed plans whereby people planning their retirement will be able to withdraw up to £1500 from their pension pots, tax-free, in order to pay for financial advice.

Pension Advice Allowance, as the plan is being called, was first announced in the Autumn Statement 2016.  The plan will allow people to withdraw £500 on up to three different occasions from their pension pots, tax-free.  The only catch is that the money has to be put towards the cost of pensions and retirement advice.

The Economic Secretary to the Treasury announced that the £500 allowance can be used a total of three times, in a single tax year.  This will allow people to access advice at different stages of their lives.  Additionally, the money can be redeemed against the cost of regulated financial advice and extends to ‘robo advice’ in addition to face-to-face advice.

Research revealed that only 22% of people approaching retirement know the value of their pot.  Less than 15% of people would be confident planning for their retirement without financial advice.

UK savers with a pension of £100,000, according to Unbiased, save an average of £98 more every month if they take financial advice.

The Government published a response to the consultation on the introduction of Pensions Advice Allowance, and HMRC will have a three-week technical consultation on the draft regulations.