Budget for the makers, the doers, and the savers!
The Chancellor’s buzzword of the statement was, “Resilience”. With the announcement of the fall in unemployment just a couple of hours before his speech, a fall in inflation and signs that the cost of living squeeze could be ending, he revised his growth forecasts up to 2.7% in 2014 (from1.8%) – but he warned the job of recovery was “far from done”.The Chancellor unveiled measures to boost the income of pensioners and savers hit for so long by low interest rates. The “surprise” towards the end of the 55-minute speech when the Chancellor announced cash and share ISAS were to be merged into a single New ISA with an annual tax-free savings limit of £15,000 from the 1st of July. For “new” pensioners (ones retiring after this budget), they will have the freedom to cash in as much or as little of their pension pot as they want, removing the need to buy an annuity. The Government evidently wants to shake the annuity market and challenging it to fix a broken system, following a number of recent complaints!Other measures for pensioners and savers included a new Pensioner Bond savings scheme to be available from January to all people over 65 and cut in the starting rate of tax savings income from 10% to 0%, with an increase in the threshold to £5,000. No big rise in the starting point for the higher rate of tax (one of our predictions! may be next year!). Mr Osborne said the threshold would rise from £41,450 to £41,865 next month, and then by another below-inflation 1% to £42,285 next year.For the “makers and doers” a scheme to boost exports – doubling the amount of finance available to £3bn. The Help to Buy Scheme is extended to 2012 and an increase in the current temporary maximum of the annual investment allowance (“AIA”) from £250,000 to £500,000 (we predicated an extension in the period available, but not an increase!).
Plus we are getting a new £1 coin! The new coin, aimed at stamping out forgeries and counterfeits, will resemble the pre-decimalisation 12-sided “threepenny bit” (if you can remember them).
Our summary of the main tax points from the budget can be found on our website