LEBC Group is pushing for the next government to introduce an annual £500 financial advice allowance for self-employed workers approaching retirement, as part of its demands to the major political parties ahead of the 12 December general election.
The IFA firm’s chief executive Jack McVitie has asked the three major parties to address retirement poverty in their manifestoes, in a letter sent this week.
McVitie called on the Liberal Democrats, Labour and Conservative parties to implement an advice allowance of £500 per year and restore carry back relief for pension savings, which was scrapped in 2006.
He said carry back relief, whereby pension savings could be made after the end of a tax year but carried back for tax relief purposes to the previous tax year, was especially helpful for the self-employed.
This relief would enable self-employed workers to “make long term retirement savings with more confidence,” he said.
Research by the Association of Independent Professionals and the Self-Employed showed that in June 2018 69% of the self-employed had no pension.
McVitie called on the parties to extend the allowance currently provided by employers of £500 a year tax-free per worker on financial advice.
“The self-employed not only have to fund their retirement savings without an employer contribution, but they also must source a suitable pension plan.
“Uncertain earnings make them wary of locking away savings for the long term and they do not have the security of employer-funded sick pay or life assurance to fall back on,” he wrote.
“An annual allowance to pay for advice would enable the self-employed to get help in building these safeguards into their lives and provide financial resilience to enable them to save for their retirement.”
The major parties are expected to release their manifestos within the next fortnight.