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13/02/2014

Extension of tax relief for workplace employee advice crucial in improving consumer outcomes.

Skandia, part of Old Mutual Wealth, has used its pre-budget submission to the Treasury to call on the Government to make it easier for employers to make quality financial advice available to their employees by extending the tax relief available.

In December 2004, the Government introduced an exemption from income tax where an employee receives pension advice, specific to them, financed by an employer up to the value of £150. This was providing all employees could access the service. Where the advice relates to more than pensions or is valued at more than £150, the employee is taxed on the value of the benefit provided.

Skandia believes that the amount of tax relief available should be increased to at least £300, to account for inflation and the wider financial planning issues that should now be taken into account.

As the workplace increasingly becomes the focal point for personal retirement savings, Skandia feels it is imperative that employees receive the necessary help to make the right decisions about their retirement savings. With the introduction of auto enrolment into workplace pension schemes and the complex decisions that have to be made when an employee enters retirement, financial understanding and advice has never been more important.

Skandia believes that the tax exemption should go further and cover more than just pensions. This is because pensions are just one financial product and decisions, particularly whether to join a scheme or not, should be taken together with an assessment of the individual’s other assets and liabilities.

Similarly, decisions about retirement income, if they are to result in the best outcome for the individual, should take account of more than just pension savings.

To limit the extra costs, and to further increase the chances of employers engaging with the process, they should be given the option to restrict the provision of advice to new employees, those approaching retirement and those approaching a significant lifestyle event.

Bob ChampionBob Champion, Retirement Product Lead at Skandia, comments:

“Retirement planning is a complex area but as an industry we are sometimes guilty of expecting the consumer to have a high level of knowledge. It is the same with financial planning as a whole. As a person’s workplace becomes their major reference point with regard to their pension, it makes sense for the employer to be able to help their employees get access to quality advice.

“Extending the tax relief available could encourage more employers to engage with the process and ensure that more of their employees receive a better financial outcome, in retirement in particular.”

For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145 076tim.skelton-smith@omwealth.com

Notes to editors:

Quilter is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at www.oldmutualplc.com.

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