- Up to 1.3 million workers are eligible to receive tax-free perk
- Can save up to £310
- But many employers yet to offer scheme
More than one million people currently seeking professional retirement advice could be entitled to a new tax perk through their workplace.
Pension Advice Vouchers, launched in November last year, allow employees who have paid for financial advice to swap £500 of taxable salary for a £500 tax-free reimbursement.
If an employee spends more than £500 per annum on pensions advice, they could save £160 if you earn between £12,000 and £46,000. Higher and additional rate taxpayers will save more – around £210 and £310 respectively.
Adam Price, of professional advisor comparison site VouchedFor, said: “Very few employers are offering the scheme, hence few employees are aware of it.
“Access to good financial advice is so important right now. This government initiative reduces the cost by up to 62 per cent. I would urge all employees to lobby their employers for access to this scheme.
“It’s especially urgent for the 1.2 million employees who already pay for advice each year. They have only until April if they want to capture their first year’s savings.”
Brian Henderson, of human resources consultancy Mercer, added: “The scheme can work really well in principle, but we haven’t seen masses of interest. If employees want it they should argue very heavily that they want it in place,” he said.
“There’s an underlying challenge with employers offering an advisory service such as the vouchers and highlighting advisers to choose from as they worry the advice could go wrong and they’re on the hook for it.
“Also, there’s probably just a lack of knowledge. It hasn’t been well publicised.”
How it works:
- Employee agrees to sacrifice up to £500 salary which would have been taxed via PAYE
- Pension Advice Vouchers service checks with adviser that £500 has been paid for pensions advice
- Employer approves request and transfers funds via Pension Advice Vouchers