The Treasury and FCA are considering boosting workplace advice tax incentives as policymakers look to improve support for savers in the wake of the pension freedoms, Money Marketing understands.
The Financial Advice Market Review is aiming to give more people access to advice and is likely to introduce radical changes to the industry.
It was originally expected the Treasury would announce the headline proposals in the March Budget but it is now understood the Chancellor may reveal several “quick fixes” but leave more complicated changes until later in the year.
This week a meeting of the FAMR’s expert panel – which includes senior figures from across financial services – discussed expanding existing provisions around workplace advice.
Currently, companies can pay up to £150 per employee per year towards the cost of pension advice before they are subject to a benefit-in-kind tax charge. However, the tax break is given on condition similar advice is offered to all employees.
It is understood the Government is considering raising the £150 cap and making the terms of the tax breaks more flexible as an incentive for firms to offer advice to staff.
Personal Finance Society chief executive Keith Richards says: “Many people would trust their employer as being impartial in guiding them but we shouldn’t underestimate when people need more. It could become a mechanism where those with a need for full advice and a propensity to do something about it find a quicker route to professional advisers.
“It could help more people become financially aware. If anything, it will probably be complementary to the advice landscape, not a threat.”
LEBC divisional director of longevity Nick Flynn says: “A lot of the advice we offer is to ex employees so that’s one way around the cap. But it seems in everyone’s best interest to expand it. £150 is fine for guidance or a telephone call but that’s as far as it goes.”
A HMT spokesman says: “We have received a wide range of responses to the Financial Advice Market Review: Call for Input. This review is now closed and we will respond around the time of Budget.”