At the moment, so-called ‘adviser charging’ rules allow you to pay for advice from your investment or pension pots (similar to old style commission rules) – but only if the advice is restricted and focussed to that particular plan/product/policy that you have.
If we are solely focussed on advice on a particular investment or pension then the adviser fee is usually all allowable to be paid at source with no tax charge i.e. our fee paid from fund with no reference to tax. You should always check with HMRC. E.g. If your fee was £2,000 for pension transfer advice to a flexible drawdown pension, this could be funded directly from your pension.
For general/holistic and unfocussed advice there is also an additional £500 'Pension Advice Allowance'. This allowance can be used up to 3 times during your lifetime and comes into play if funds taken from a pension scheme are used to pay for wider retirement planning, including advice on other pension schemes or non-pension investments such as ISAs as part of a holistic retirement plan. Previously, this would have been an unauthorised payment and taxable at a minimum of 55% under the old pension tax rules. Under the new rules, however, up to £500 can be put towards a holistic retirement financial plan without being taxed.
Many people use this route to fund adviser fees as indirectly there may be tax benefits or other savings e.g. you received tax relief when you paid into a pension and you are able to arrange for fee payments directly from the pension fund tax tax free.