Introducing a Pensions Advice Allowance

Published on 11 October 2016

Although the LITRG welcomes the opportunity for people to access pension funds for the purpose of paying for independent advice on retirement planning, we do not consider that the proposed £500 is anywhere near adequate to meet the probable fees of an independent financial adviser or other qualified adviser for full and proper advice.

We recommend:

that the upper limit be raised to at least £1,000 or a maximum of 5% of an individual pot
that provision is made for the limit to be regularly reviewed and uprated to ensure that it continues to be a realistic figure as compared to changes in the cost of advice (we suggest it is reviewed at least every three years)
that interaction with means-tested benefits legislation is considered and addressed as appropriate – i.e. that it is clear that any pension withdrawal under the Pensions Advice Allowance (PAA) is not to be considered income for means-tested benefits purposes
that savers should be given two bites at the cherry, one at least 10 years before permitted pension age in order to give savers sufficient time to take steps to improve their pension position, and again at point of crystallisation
that adequate advice on the impact on benefits should be included, especially in view of the increasing number of auto-enrolled pension savers who may amass only small pots
that only qualified and regulated advisers should be able to draw the PAA from providers to maximise the value of advice given and minimise fraud and scamming
that the pensions industry be required to issue standardised notices about the availability of the PAA facility at the appropriate dates and the proposed new Public Financial Guidance service should promote knowledge and awareness at all stages of its pensions guidance
that the Government might consider a penalty-free Lifetime ISA withdrawal analogous to the PAA, if savers have chosen to provide for their retirement in that scheme instead of, or in addition to, a traditional pension.

The LITRG submissions can be found here

(11-10-2016)

Contact: Paddy Millard (please use form at /contact-us) or follow us on Twitter: @LITRGNews

Tax guides

Information for employers What is the Job Retention Scheme? Illness or self-isolation Self-employment income support scheme (SEISS) SEISS: where do I include the grants on my tax return? Tax credits and coronavirus Coronavirus payments

Introduction to the tax system How do I work out my tax? What income is taxable? What tax allowances am I entitled to? What tax rates apply to me? How is my tax collected? What if I cannot pay my tax bill? Do I need to complete a tax return? Self Assessment: understanding the basics What is Simple Assessment? How do I claim tax back? How do I claim back tax I have overpaid through PAYE on wages or pensions? How do I claim back tax if I complete a tax return? How do I claim back tax if I am taxed under the Construction Industry Scheme (CIS)? How do I claim back tax on savings income? How do I claim a marriage allowance refund? How do I claim back tax on a payment protection insurance (PPI) pay-out? Should I use a tax refund company? What is National Insurance? How do I get a National Insurance number? What are Specified Adult Childcare credits? What is Scottish income tax? What is devolution? Do I have to pay Scottish income tax? How does Scottish income tax work? What is Welsh income tax? Do I have to pay Welsh income tax? Do I have to join a pension scheme? Tax relief on your pension contributions HMRC digital services Enquiries, penalties, appeals, complaints and debt Enquiries How to survive an enquiry by HMRC Tax penalties Tax appeals Alternative Dispute Resolution How do I complain to HMRC? What if I cannot pay my tax bill? What if I have a tax credits overpayment?

Am I employed, self-employed, both or neither? Working through a limited company What is the national minimum wage? How do I work out my tax? What income is taxable? What tax allowances am I entitled to? What tax rates apply to me? How is my tax collected? How is tax collected on taxable state benefits? How do I check my coding notice? Do I need to complete a tax return? What tax do I pay on redundancy payments? Termination payments on leaving the armed forces Employment benefits and expenses What are benefits-in-kind? What payments and benefits are non taxable? What if I incur expenses in relation to my job? What travel expenses can I claim? What if I use my own car for business purposes? Payroll giving Allowances and expenses paid to armed forces personnel and deductions from their income Pensions and employees What is automatic enrolment for employees? What National Insurance do I pay as an employee? How do I repay my student loan? What if I do not pay enough tax? What if I pay too much tax? What if I work abroad temporarily? What if I am in the armed forces and work overseas? First time workers Apprenticeships

Am I employed, self-employed, both, or neither? How do I register for tax and National Insurance? What business records should I keep? Working out profits, losses and capital allowances When do I make Self Assessment payments and file my tax return? How do I pay tax on self-employed income? What tax allowances am I entitled to? What is the trading allowance? What National Insurance do I pay if I am self-employed? What is the Construction Industry Scheme (CIS)? Tax checks for taxi, private hire and scrap metal licences How do I work out my profits for universal credit? Do I have to pay VAT if I am self-employed? What is Making Tax Digital for VAT? Pensions and self-employment How do I repay my student loan if I am self-employed? Introduction to enquiries

Tax status Setting things up How the Pay As You Earn system works Taking on a new employee Reporting PAYE in real time Pay and deductions Ongoing payroll tasks End of year processes Employee leaving Employment law Keeping records Getting things wrong Getting more help

Can I live and work in the UK? Residence and Domicile Employment and self-employment National Insurance for migrants Coming to the UK to study Other migrant issues EU and EEA countries

Going abroad Other income Student loans Types of student Volunteering and training Working Do students have to pay council tax? Glossary of Forms Jargon buster Where can I get further help and information?

Help for employees and the self-employed Help for employers Independent living Caring for someone Leaving the armed forces as a result of disablement VAT reliefs for disabled and older people Trusts for disabled people Apprenticeships and disability

Savings and tax Property income Council tax and rates Giving to charity Income from a trust or from the estate of a deceased person Capital gains tax

Tax credits and benefits Tax credits State benefits Child benefit Universal credit

Employer-supported childcare Free childcare places Tax credits childcare support Universal credit Other childcare support Tax-free childcare

Taxes on death: overview Dealing with the deceased's own tax affairs Tax on income and gains after death Death of a spouse or civil partner Joint property on death Pension and life assurance policies on death Income from a deceased's person's estate Inheritance tax reliefs and exemptions State benefits on death Getting help with bereavement and inheritance tax Bereavement jargon buster

Share this page