Philip Hammond has delivered his first Statement as chancellor. The big news? He’s moving the Budget to the autumn and the Autumn Statement to Spring.
You can catch up with all the headlines on BBC News. Much of the help concentrated around so-called Jams (just about managing). But here are our thoughts on the main announcements to affect the personal finance of our customers…
More pensions changes
The good news is there are to be no changes to the current levels of pensions tax relief, as may have been feared. But a restructuring of the Money Purchase Annual Allowance will affect some over 55s.
If you’re still working after drawing cash from your pension pot, listen up.
If you draw cash from your money purchase pension scheme on a flexible basis (beyond the initial 25% tax-free lump sum), from April 2017 you’ll only be able to get tax relief on future money purchase pension contributions up to £4k, rather than the current £10k allowance.
The idea is to stop people essentially getting tax relief twice, so perhaps that’s fair. But if you do find yourself in this situation, it will limit the money you’ll have to play with. It’s certainly one more thing to consider if you were planning to use the new pensions freedom to access your pension pot flexibly, and find you subsequently want to put some back. You’ll have to plan future retirement savings carefully.
A piece of very welcome news on pensions – cold calls offering exotic investment opportunities to people cashing in their pension pot will be banned. Too right.
A new savings bond
The government is trying to appeal to savers by introducing a new savings bond in spring 2017. The bond will be open to over 16s with between £100 and £3,000 to invest for three years.
The indicative rate being offered up is 2.2%, although that is, of course, subject to change. The current equivalent best buy is 1.62%. So it seems like a good idea. We can’t help but feel a little underwhelmed as interest rates may have gone up by then anyway. We’ll wait and see.
Some other stuff
Salary sacrifice will effectively be cancelled on some items (computers, gym membership, health screening) from April 2017 so employees will no longer be able to lower their tax bill by using these.
Lettings agents will be banned from charging up front fees to tenants for things like reference checks. These costs will shift to the landlord.
So nothing really ground breaking. But do give us a call if you hear anything that you’d like to understand better. We’re happy to help!
This article is for general use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be or constitute advice. The value of your investments can go down as well as up, so you could get back less than you invested.
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