Equiniti has developed a new service for employers to facilitate a tax-efficient salary sacrifice scheme.
The service allows employees to claim up to £500 towards the cost of pension advice.
This comes following new government legislation that came into effect on 16 November 2017, which introduced £500 towards employee pension advice as a non-taxable benefit.
Tim Brook, head of HR solutions platform and engagement at Equiniti, said: “Given the additional choice and risk the consumer has taken on since the introduction of pension freedoms in 2015, proper advice has taken on an increasing importance in educating citizens to the choices they can make with their pension.
"While the government's initiative in 2017 to introduce a sum of £500 that could be reclaimed by the employee from their employer was a big step forward, it has seen limited take up thus far.
"We hope our service will start to entice more employers to offer access to advice through salary sacrifice which will in turn drive employee engagement and that employees see the value of receiving pensions advice.”
Equiniti’s salary sacrifice pension saver will be formally launched as a flexible benefit in the second half of 2018 but according to Mr Brook it has already been generating interest with many companies expressing their interest in the scheme.
Martin Bamford, chartered financial planner and managing director for Surrey-based Informed Choice, said: "There is a huge need for affordable pension advice and better employee engagement when it comes to retirement planning. Cost is often a barrier to seeking professional advice and therefore taking meaningful action to improve your long-term financial position.
"I would have some concerns about the ability to deliver a comprehensive advice service for £500, although tailored advice focused on making decisions about pension scheme membership could be delivered at this price point."
aamina.zafar@ft.com
