Employers should be given incentives to provide advice for their staff to help them plan for retirement, the Association of Consulting Actuaries says.
Currently, employers can provide up to £150 of advice tax-free but beyond that employees’ advice is taxed as a benefit in kind, meaning individuals are taxed as if it is income.
But the ACA says the threshold should be raised to £500 for an initial advice session at age 50, and to £800 for a second session at the point of retirement.
ACA chairman David Fairs says: “With the Budget freedoms you’ve got entitlement to go along to Pension Wise and get guidance but our feeling is that will help you understand the options, but not necessarily decide which of those options are right for you.
“I think a lot of people will go back to their employer after Pension Wise and say they need someone to help them make the right decision, a lot of people trust their employers more than financial advisers, so they’re well placed. But at the moment a lot of them are not in a position to do that so if there was financial incentive for them to provide advice that would help both the employer and the employee.”
The idea is part of the organisation’s retirement income manifesto which also calls for early access to pensions once someone has been saving for ten years and to allow members of defined benefit schemes to access the pension freedoms without first transferring to defined contribution arrangements.