The 2015 Budget didn’t contain that many surprises as information had been leaking for days and at least some of it had been heralded as far back as the Autumn Statement in 2014. But it’s less about what and more about what to do next…
In terms of the man and woman in the street, the key elements include:
1. Personal tax
These include how much you can earn before tax and when the higher rate of tax kicks, promises of more to come. But that assumes this government and its promises stay in power. You may want to look at your first pay cheque of the new tax year and think about sweeping the paltry benefit straight into savings.
2. National Insurance
If you under 21 you’ll also see a little extra pay as you won’t pay National Insurance (but you may want to think about what this means in the longer term in terms of building up a state pension for yourself?).
Big changes to annuities, including being able to ‘sell’ an annuity you’ve already taken out. Key think here is DON’T DO ANYTHING IN A RUSH. We’re launching a whole new section of the website to help you think though the pension changes, starting with a special blog tomorrow – watch this space.
4. Flexible ISAs
The tax-free ISA allowance will increase to £15,240 in April. But from September, the rules will change so that people can take money out of their ISA account and put it back at a later date without losing the tax-free status. There will be a flurry of new products around this. You may want to be wary of locking money into a regular ISA now.
5. Help to Buy ISAs
This is designed to help first-time buyers trying to build a deposit. For every £200 saved, the Government will add £50, up to a maximum of £3,000 in any tax year. Again, expect a flurry of products around this. To get the most benefit you’ll have to cut through all the marketing hype and find the best rates and the least onerous lock ins.
6. Personal savings allowance
From April next year, the first £1,000 in savings income is exempt from tax. This is reduced to the first £500 for higher rate taxpayers. Allowances are a useful boost to savings but, again, if you really want to earn money on your savings you need to shop around and be an active saver not a passive one.