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Gov’t unclear over pensions advice allowance take-up

Treasury unable to say how many are accessing pensions savings early to fund advice

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The Treasury has said it can’t estimate how many people have dipped into their pension early to fund advice under new Government rules.

The pensions advice allowance was introduced in April, allowing savers to take £500 tax-free from their pension up to three times to redeem against the cost of retirement advice.

Responding to a Freedom of Information Act request from Money Marketing, the Treasury said that it could not provide any estimates of how many had used the allowance so far, or how many were likely two over the next three years.

It said it had also not estimated what the average age of allowance users would be, or how many would use all three tranches of the allowance or opt for fewer instead.

The PAA allows the £500 to be withdrawn up to three times, so long as none are made in the same tax year.

John Lawson: The pensions advice allowance needs one vital tweak

The allowance will be available at any age, and can be redeemed against both face-to-face advice and robo-advice services.

The Treasury said it did not have an estimate of how many pension savers would use the allowance to fund face-to-face compared to automated advice services.

The Government has estimated the cost to the Treasury of introducing the moves as negligible.

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