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ABI calls on MPs for £500m tax breaks to fund advice

The Government should fund financial advice in the workplace to the tune of £500m a year by providing tax incentives to employers which offer their staff access to IFAs, says the ABI.

In a speech to the all-party Parliamentary group on insurance and financial services this week, ABI director general Mary Francis outlined an action plan to close the savings gap which includes IFAs offering face-to-face advice in the workplace.

Combined with its recent proposals for an employer tax credit on pension contributions, the ABI is calling on the Treasury to implement measures worth £1.4bn to encourage savings. The measure would be aimed at small employers and require them to offer access to a financial adviser every other year to take full advantage of the tax breaks.

The ABI is also calling for 80 per cent of the costs of advice to be stripped out of safe-harbour products such as stakeholder and Isas, making it easier for advice to be extended to the mass market.

Research conducted for the trade body by Oliver Wyman & Company says it takes an average of 12 hours for an IFA to complete a product sale. The ABI says this situation is untenable.

Francis said: “Half of all small employers said they would provide more advice if they received financial help from the Government. That could take another £2bn off the savings gap.”

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