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Pension Advice Vouchers: See how you can save up to £310 through Pension Advice Vouchers

MPA Financial Management - Thursday, December 21, 2017

The Finance Act (No.2) was passed on 16th November 2017 and introduced Pension Advice Vouchers, a new salary sacrifice benefit that can save an employee up to £310 pa in tax and national insurance.

This non-taxable benefit enables employers to reimburse employees for costs incurred through receiving pension advice from a registered financial adviser, up to £500. This has been introduced as an incentive to highlight the importance of seeking professional financial advice, particularly on such a complex topic.

Members of a pension scheme may wish to go through an adviser and of course any clients with an existing relationship with an adviser at MPA, or those who wish to speak to one are welcome to do so. Alternatively, the Pension Advice Vouchers can be accessed via ‘VouchedFor’ –  an independent site allowing members of the public to find, rate and review professionals such as IFAs.

How it works…

The three main steps:

  1. The employee agrees to sacrifice up to £500 pa from their salary, which ordinarily would have been subject to tax and national insurance
  2. VouchedFor will confirm that the employee has received and paid for financial advice
  3. The employer will then approve the request and transfer the appropriate amount in the form of pension advice vouchers, these are NOT taxable.

Is it worth it?

It is estimated that around three quarters of advisers know about the new Pension Advice Vouchers, a small survey conducted by VouchedFor indicates that only one in ten have utilised the benefit. https://www.moneymarketing.co.uk/vouchedfor-launches-new-service-facilitate-advice-tax-break/

This may be down to a number of issues, including:

  • Lack of coverage in the press
  • The £310 amount that can be claimed is relatively small
  • The expected administration work to be involved from both the advisers and employers point of view

Despite these issues, it seems almost too good an opportunity to miss out on if you are eligible to claim. VouchedFor claim that: “Pension Advice Vouchers save employees money, reduces employers’ national insurance contributions, and keeps admin to a minimum.”  https://pensionadvicevouchers.co.uk/faq-employee

For clients that are seeking financial advice, we think it seems appropriate to integrate the discussion of Pension Advice Vouchers into their meetings. For those specifically seeking advice regarding their pension and any existing clients, our advisers at MPA would encourage the discussion.

As qualified pension specialists at MPA, going forward we hope to raise awareness of the potential benefit available. We feel that whenever a benefit such as the Pension Advice Vouchers may be accessible it is our job to present this to clients at the forefront of the advice process.

If you want to find out if you are eligible for the benefit, please contact your adviser at MPA or see the full website VouchedFor -  https://pensionadvicevouchers.co.uk/

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