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Budget 2015: What did we learn?

Budget 2015: What did we learn?

As we enter the beginning of a new tax year, it seems like a long time ago that the Chancellor delivered his 2015 Budget statement. Time really flies when you're doing accounting.

For everybody else, the Budget is likely to still be fresh in their minds. Businesses and individuals alike will still be digesting what the announcements will mean for their finances and business prospects.

To re-cap, here are our top 3 budget announcements that are likely to affect you.

Setting your pension savings free

You'll probably be familiar with the pension reforms announced during last year's budget. Much has been written about the new freedoms granted to those over 55 so we won't retread old ground here (however, if you want to know more you can speak to one of our advisers).

What you may be less familiar with are the changes to annuities announced during the latest Budget. From April 2016, retirees will no longer face a 55% tax charge if they want to sell their annuity. Instead, selling retirement income will only attract tax at the marginal rate. Savers will then be able to either withdraw the proceeds in multiple lump sums or use it to open a drawdown account.

Making your paycheck go further

Before last month we all knew that the income tax personal allowance would rise to £10,600 on 6 April 2015. Going into Budget 2015 it was more a question of how much further the Chancellor was prepared to go.

And further he went. The personal allowance will rise to £10,800 from 6 April 2016, and the year after the threshold will rise further to £11,000. The threshold for the higher rate of income tax will also rise to an inflation-busting £43,300 in 2017/18.

A Budget for the savers

The Chancellor announced a range of new measures designed to assist savers.

From April 2016, a new personal savings allowance will allow savers paying the basic rate of tax to remove tax on up to £1,000 of savings income. Higher rate taxpayers will be able to remove tax from up to £500 of savings.

People with aspirations to get onto the housing ladder will be able to benefit from a new Help to Buy ISA. Account holders will receive a £50 government contribution for every £200 saved into the ISA.

Get in touch

We have a wealth of information contained in our detailed guide to Budget 2015.

Contact us on 01628 631 056 or email geoffk@knightandcompany.co.uk to discuss how the budget announcements affect you.