March 2015 Budget: Explained
March 19, 2015
On 18th March 2015 Chancellor George Osborne has delivered a Budget in which he said showed Britain was “the comeback country”.
The announcement included several important changes which will impact investors and savers, these have been highlighted below.
Positive ISA Changes for Savers
ISA changes will allow savers to withdraw money from their ISA without it counting towards their annual tax-free entitlement. This could prevent unnecessary short-term borrowing and is another reason to use ISAs in conjunction with pensions.
Good news for First Time Buyers
For every £200 saved the Government will top it up with another £50. If you save £12,000, the Government bonus will boost your total savings to £15,000. This will be known as a Help to Buy ISA.
Personal Savings Allowance
A Personal Savings Allowance will be introduced of up to £1,000 of a basic rate taxpayer’s savings income, and up to £500 of a higher rate taxpayer’s savings income each year from 6 April 2016. The Personal Savings Allowance will not be available for additional rate taxpayers.
From 2016/17, it is proposed that access to the new flexibility will be extended to annuitants by allowing them to sell their annuities.
Lifetime Allowance Reduced
Pension pot lifetime allowance is set to be reduced from £1.25m to £1m from next year.
A review will be undertaken on the avoidance of Inheritance Tax through the use of deeds of variation for Wills. A report will be released by Autumn 2015.
How will these changes affect you?
If you have any questions about this week’s Budget or would like advice, please get in touch on 01793 750101 or Request a Call Back and we will be happy to give you more information.
These announcements reinforce the Chancellor’s aim of encouraging people to save and invest for the future. The tax year ends on 5 April, so time is running out to make use of this year’s tax allowances. If you are considering making an ISA or pension contribution you should talk to your Financial Adviser without delay.
The impact of any changes to tax rates or allowances will depend on your personal circumstances. Talk to a one of our qualified advisers to see how the changes affect you.