The consultation is the result of recommendations from the Financial Advice Market Review (FAMR) final report, which also includes proposals to ‘improve the existing £150 income tax and National Insurance exemption for employer-arranged advice on pensions.’
Richard was part of the expert panel supporting government through the FAMR consultation process and remains part of the Financial Advice Working Group, which has been tasked with developing some of the recommendations set-out in the review.
Richard Freeman says:
“The financial planning market has changed dramatically in recent years, as has the retirement savings landscape. Individuals approaching retirement have a plethora of options available to them and it is really important they are able to balance flexibility with sustainable, long-term planning. The best way to achieve this and get peace of mind and reassurance about retirement choices is to see a professional adviser.
“Being able to access part of your pension to cover the cost of advice is a step in the right direction and will help people meet the cost of retirement planning advice from a qualified professional.
“However, there is still more to be done. This is just one part of the output from the Financial Advice Market Review launched last year but we hope it will be the first of many measures introduced to help people access financial advice.
“There is still room for greater incentives for employers to help their staff meet the cost of advice. It is already possible for firms to help retiring employees get advice, with up to £150 of advice tax-exempt when arranged by the employer. This threshold should be increased to give consumers the best possible chance of accessing professional financial advice at-retirement.
“And there are lots of other steps that could be taken to improve access to advice, both by creating a business environment that allows financial planning firms to grow and also by encouraging consumers to recognise the various points during their life when they could benefit from some help with their financial choices.
“Our research with YouGov shows that people who saw a financial adviser to review their plans for retirement end up with an average of 41% more income than those who had never taken advice.”