dunroving

Wondered what people think about the budget. For the oldies and those with some savings, the changes to ISA and pension rules must be very welcome. Higher income tax thresholds help, too.

Did they change stamp duty? Goodness knows it needs it.

old.sparkles

The only mention of stamp duty changes I can see is that people using a company to buy a house above $500k will pay 15% duty now (previously this was only on homes over £2M).

The Help to Buy scheme has been extended to 2020 for people buying new homes.

BritInParis

The increase in income tax allowance to £10,500 is very welcome as is the reduction in beer and long haul air passenger duty.

According to the BBC I'll be about £140 better off next year.

http://www.bbc.co.uk/news/business-17442946

old.sparkles

Not sure if the increase in tax allowance is this year though - also from the bbc

Source - http://www.bbc.com/news/business-26619585

BritInParis

Sorry, to be clear, the £10,000 increase for 2014/15 was already announced, but now it'll go up again the following tax year as well. Literally putting money back in my pocket. Thank you Lib Dems!

rebs

Not sure about 'winning' but the pension changes will have a big impact on my household situation.

My husband's pension is defined contribution, which he has been paying into for the last 20 years and is likely to be a sizeable 'pot' when he retires. It will make a massive difference to us if we are no longer forced to purchase an annuity.

However... some random thoughts on the pension changes -

What's to stop people blowing the lot and then relying on the state for assistance?

Will council's have their eye on pension pots to claw back care costs, if needed?

One of the major downsides to the current system of purchasing an annuity, is that the pension pot dies then the pensioner dies - remains with the insurance company - presumably, in future, the pot will remain as part of the estate of the deceased?

I was reading yesterday that the share price of annuity provider companies dropped a bit after the news.

I shall be interested to see how the structure for the 'free advice' develops - who will be providing that? who will be paying? George Osborne on breakfast this morning casually referred to 'good advice' which, in my experience, is not always easy to come by...

mikelincs

The people who will be winners are those pensioners with savings to invvest, those without get nothing. The vast majority of those winners are the traditional tory voters who were possible UKIP voters, even Farage admitted that.

robin1234

I'm a dual citizen, US/UK, and currently still living in the US. As a US taxpayer, it's hard to see if any of this would help me even if I lived in the UK since I'd have to play by US tax rules too.

I haven't yet bought a place in England to live. I'm afraid of a significant increase in UK property prices, if lots of recent retirees suddenly have the ability to cash out and buy a holiday home or investment property.

rebs

Can't help with any of the US/UK tax stuff, but I have seen some speculation about impact on house prices if, as you say, retirees maybe look at buy to lets as investments....

chris955

It certainly seems to have gone down well with the business sector which is very important as the country continues to grow.

Editha

My husband and I will benefit from the increase in tax allowance.

We are living on savings for the next couple of years, more than pension income, and we may be able to benefit from the new ability to transfer part of the unused personal allowance to the other partner.

We've got another few years to go before we can benefit from the new National Savings Pensioners Bonds, but if interest rates are still low in four years time, the bonds will be helpful.

Bud the Wiser

Not a bad budget overall. Anyone would there was an election coming up in the near future.

Did anyone read the bit about HRMC having direct access to your bank account and could withdraw money without your consent? Having had HRMC hound me for £60k in the 90's, which eventually I was able to prove I didn't owe, I find that little bit of news quite disturbing.

Bud the Wiser

I wonder how many pensioners will withdraw a lump sum from their pension pot to allow their grandchildren ( or children !! ) the opportunity to have a deposit for a house?

dunroving

The pension thing was a big surprise to me. That's a pretty big tax break for high earners paying into a personal pension scheme. You essentially could start paying into a SIPP and treating it like a savings account. It's almost like a reverse-ISA (tax-break on the way in, pay tax on the way out).

For someone paying 40% income tax, that would essentially enable you to get an immediate 67% bonus on what you pay in, compared to paying into a regular savings account or an ISA. If you are only a 20% tax-payer in retirement, that is an excellent deal.

I am hoping it will cause the insurance industry to work on better-rate annuities. These financial companies seem to be able to do what they want with impunity. About time they were put on the back foot.

rebs

Yes, that is what I have been reading the last couple of days - apparently this is a paradigm shift in the 'saving in an ISA or a pension' debate


Who knows what might happen? I would hope that products might improve, but I have also read speculation that annuities might get worse due to adverse selection - ie, those who are ill, family history of early death etc are more likely to be the ones withdrawing their pension pot. On the other hand, those that are healthy and with a good lifestyle etc are the ones more likely to feel they would benefit from an annuity.