The Government is facing renewed calls to increase the £150 tax-free limit on independent financial advice paid for by employers.
In its submission to Lord John McFall’s workplace retirement income commission call for evidence, the Association of Consulting Actuaries urges policymakers to improve fin-ancial education to create a “culture of saving” in the UK.
ACA chairman Stuart Sou-thall says this could be achieved by increasing financial education in schools and imp-roving financial incentives for employers considering using an IFA.
He says: “Employers should be encouraged to provide education to their employees on financial matters and indeed might be incentivised to provide them with access to independent financial advice by increasing the £150 tax-free limit on independent financial advice paid for by the employer.”
Aifa is lobbying Treasury officials for the removal of the tax-free limit.
Director of policy Andrew Strange says: “Removing the £150 tax limit for financial advice for employees will help to encourage firms and employees to access independent financial advice and as a result make better provision for themselves. Aifa will continue to discuss with the Treasury how this can be taken forward.”
The ACA’s response presses policymakers to provide a tax incentive for private pension schemes that meet a specific “quality standard” above the 8 per cent minimum combined employer/employee contrib-utions that will eventually apply to Nest.
Worldwide Financial Planning IFA Nick McBreen says: “The Treasury is going to have to increase the limit because there is no way that people will get proper advice for £150, which works out at about an hour of an IFA’s time.”