Pensions minister Baroness Ros Altmann has said she would like to see advisers create a “fixed price package” of advice to provide a basic service affordable under the Government’s £500 ‘advice allowance’.
Chancellor George Osborne announced the Pensions Advice Allowance in the March Budget, which will permit people to withdraw £500 tax-free from their defined contribution pension pot before the age of 55 to spend on financial advice.
But some advisers have said £500 is not enough to pay for anything near a comprehensive appraisal of someone’s pension affairs.
Responding to a question from Financial Adviser about what she expected advisers to provide under the advice allowance, Baroness Altmann said £500 was a “realistic sum” for advice, and she would welcome set prices from advisers for certain services.
“I’d like to see the industry design some kind of fixed-price package,” she said, adding: “Advice firms with lots of clients might think that would be really interesting – a basic advice service for £500, individualised, pre-approved.”
Adviser view:
Paul Turner, principal partner at Leeds-based Financial Planning Practice, said:
“The limit used to be £150 – that was a non-starter. This is a step in the right direction, but what I’d have reservations about is that you can do it as a one-off.
“There’s an element of risk from my point of view because you wouldn’t be able to verify the kind of advice being given.”
