The Treasury is seeking views on whether to allow defined contribution (DC) members to access their pensions before retirement to pay for financial advice.
The advice allowance will allow savers under the age of 55 to access up to £500 tax-free before retirement to get regulated advice on how to use their savings in retirement.
The consultation on the proposal, which was announced in March, asks what the minimum age for accessing the allowance should be, and how to promote it.
Current provision only allows savers to access their pots early to pay for advice specific to that pot, without incurring a tax charge of at least 55%.
However, the new allowance would let them receive advice on all pension pots and other savings vehicles, such as ISAs. This includes defined benefit (DB) savings, as long as the allowance is taken from a DC scheme.
Economic secretary to the Treasury Simon Kirby said: "Pensions and savings decisions are some of the most important a person will make during their lifetime. It is therefore vital that people can access the financial help they need and feel confident choosing the support that works for them in their retirement.
"I look forward to the industry engaging with the pensions advice allowance consultation, and taking this opportunity to tell us how the allowance could best meet the needs of both consumers and firms."
The consultation will close on 25 October, with an aim to introduce the allowance in April 2017.
The Treasury's plans have been roundly welcomed by pension professionals.
Hargreaves Lansdown head of retirement policy Tom McPhail said it would be good for savers, as long as adequate protections against scammers were in place.
He said: "This is good news for customers, extending the ways in which they can access professional help as they approach retirement.
"There are various risks which will need to be guarded against, such as fraudsters targeting this new facility by pretending to be financial advisers, or investors splitting their pension into multiple small pots to strip all their money out in £500 tax free chunks with the help of an adviser."
Meanwhile, Aegon pensions director Steven Cameron said the allowance would help savers prepare for retirement earlier.
He said: "We support the Treasury's plans to make the pensions advice allowance available before age 55 so people can seek advice well ahead of actually moving into retirement.
"This will allow them to plan ahead for the retirement they aspire to, including reviewing adequacy of contributions and which investment funds are best for them."
However, the Treasury has admitted the allowance will not be available to savers without products which allow adviser charging by customer agreed remuneration. Schemes with the policy allow members to pay for advice with a charge on their premiums or funds, but many older schemes do not yet allow this.
The consultation document said: "It is the government's understanding that if a consumer does not hold any pension products that offer adviser charging, the allowance may not be available to them.
"This is likely to be mitigated to some extent as some providers are routinely transferring customers into newer products that commonly have adviser charging facilities."
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