The Government should scrap the £150 tax-free limit on independent financial advice paid for by employers, the Association of Consulting Actuaries says.
In its submission to Lord John McFall’s Workplace Retirement Income Commission, the ACA urges policymakers to improve financial education to create a “culture of saving” in the UK.
ACA chairman Stuart Southall (pictured) says this could be achieved by increasing financial education in schools and improving financial incentives for employers considering using an IFA.
He says: “We believe it is essential to increase financial education, beginning in schools and ultimately spreading throughout the entire population.
“Employers should also 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 abolishing the £150 tax-free limit on independent financial advice paid for by the employer.”
An ACA spokesman says the limit should replaced with something “much higher”, although a specific figure has yet to be determined.
He says: “£150 is not enough to get any sufficient level of financial advice.”
The organisation is also pushing policymakers to offer a tax incentive for private pension schemes which meet a specific “quality standard” over and above the 8 per cent minimum combined employer/employee contributions which will eventually apply to Nest.