A number of major pension providers are not offering their customers access to the pensions advice allowance, citing poor demand from both advisers and clients.
The pensions advice allowance was introduced on 6 April to allow consumers to access up to £1,500 early from their pension pots to pay for advice.
Consumers can access £500 a time in three separate tax years, which can be put towards robo or face-to-face retirement advice, but not towards non-retirement advice such as inheritance tax planning.
Providers are not obliged to offer the allowance, which was one of the first proposals to be formally progressed from the Financial Advice Market Review.
The Financial Times reports firms including Aviva, Aegon, Fidelity, Legal & General, Prudential and Royal London are all not offering the allowance.
Pru told the newspaper it backed the allowance, and had investigated whether to make it available to customers.
But it says: “Because there has been minimal demand from consumers, and the pensions advice allowance is complicated to administer, we have decided not to introduce a facility to use the allowance at this time.”
Aviva says customers can use its existing adviser charging system to pay for advice, but says some will need to transfer to another product that facilitates adviser charging.
Aegon also says it supports the principle of the allowance, but it was “failing to take off” with customers and advisers.
Providers who offer the allowance include Standard Life, Hargreaves Lansdown and LV=.
The Treasury says: “Providers now have the tools they need to help consumers use this allowance and support them to make the best financial decisions for later in life.
“We want to help people understand their pensions so they can plan for a comfortable retirement.”
Personal Finance Society chief executive Keith Richards has called for the allowance to be actively promoted, to “send a signal about the importance of advice more widely.”