Norwich Financial Advice
The 2015 budget was Mr. Osborne’s sixth budget as Chancellor and the last before the next General Election
This was a positive Budget, aimed at creating a 'feel-good' situation before the election and the Chancellor described how “Britain is walking tall again”.
Significant improvements for savers were introduced which included fully flexible ISAs and a Help To Buy ISA-scheme which should aid first-time buyers in finding their deposits.
The personal allowance for income tax is scheduled to rise to £11,000 in 2017 and the higher rate income tax threshold will continue to rise towards £50,000.
Income tax on savings income is also to be reduced for most savers, with the introduction of a £1,000 tax-free savings allowance.
Some brief highlights will be given below and we will contact existing client directly where the changes are likely to have impact on their Financial Planning.
· The lifetime allowance for pensions savings is being reduced from £1.25m to £1m from April 2016
· The new lower lifetime allowance will then be increased in line with CPI inflation each year from April 2018. No change was announced to the £40,000 annual allowance for pension contributions.
· Retirees who have already purchased an annuity with their pension pots will be able to sell these back to insurance companies for cash This second-hand annuity market will be opened in April 2016
· The income tax personal allowance will be increased to £10,600 in 2015/16 and will then rise to £10,800 in 2016/17, and to £11,000 in 2017/18.
· The higher rate income tax threshold is going up to £43,300 in 2017/18.
· Savers will benefit from a new £1,000 tax allowance, which means that most savers will not pay income tax on their savings. This will be introduced in April 2016 and will be available for basic rate taxpayers.
· Higher rate taxpayers will benefit from a £500 tax-free savings allowance. Additional rate taxpayers, those earning more than £150,000 a year, will not receive any tax-free savings allowance.
· A new fully-flexible ISA was announced and will be introduced in the Autumn. This will allow savers to put money into an ISA, take it out without losing that part of their annual ISA contribution.
· Also announced was a new 'Help-To-Buy' ISA for first-time buyers who will benefit from a 25% government top-up when saving towards their deposit.
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