We thought it would be useful to give you a run-down of the UK Budget 2015 to give you an idea of where the country is at and from a financial perspective how it affects you.
The Economy shows that the UK has grown faster than any other advanced economy at a rate of 2.6%, however lower than predicted in December. It should grow over the next four years at a similar rate.
According to OBR data our living standards are ‘higher’ than in May 2010 with households being on average £900 better off in the last five years.
Borrowing is set to fall around £7 billion from 2013-4 and is expected to fall each year until we reach a surplus by 2018.
Pensions have changed dramatically this year with the ability of pensioners to trade in their annuities for cash and the 55% tax charge is abolished.
Also widows of Firefighters and Police Officers who choose to marry again, will have their existing pensions protected.
The total amount you can pay into a pension will also be reduced from £1.25m to £1m.
Petrol duty has been frozen and the planned increase due in September has been cancelled. This means the cost of our fuel will not rise as planned.
There will be a new ISA to help first time buyers with their deposit. You can pay money in and get a top up from the Government through the ‘help to buy ISA’ scheme. You can save up to £200 per month to a total of £12,000. For each £200 you pay in, the Government will pay £50. You won’t get this bonus until you actually buy your first home.
The Marriage Allowance has been introduced. It is for married couples and civil partners where one partner doesn’t work or doesn’t earn enough to qualify for tax – so under £10,600 per year. It looks to be worth over £4 per week. You need to apply for it. https://www.gov.uk/marriage-allowance
Tax and Savings
All savings interest will now be paid without the tax being taken off . This is from ordinary savings accounts – check your statement if you are not sure.
The personal allowance for tax will increase over the next few years, so you can earn the following before you are taxed: £10,600 in 2015-6, then £10,800 in 2016-7, to £11,000 in 2017-8.
The 40% threshold will also rise from the current £42,385 to £43,300 in 2017-8.
Annual paper tax returns for the self employed will be abolished and replaced with digital accounts and class two national insurance contributions for self-employed people to be abolished in the next parliament.
There is a new personal savings allowance of the first £1,000 interest on savings income to be tax-free for basic rate tax payers and £500 allowance for 40% tax payers.
The annual savings limit for ISA’s has increased to £15,240 and ‘fully flexible’ ISA’s will let savers withdraw money and put it back again later in the year without losing any tax-free allowance.
The wider community
The Government has set aside £25m to support army veterans, including nuclear test veterans. Also, monies from Libor fines (money the Government fined from the banks PPI scandal), around £75m, are to go to charities for regiments which fought in Afghanistan and also to contribute towards permanent memorials to those who died and to renovate Battle of Britain memorials.
A tax on multinational firms moving profits offshore artificially will come into effect in April called ‘diverted profits’. Banks have also been barred from deducting compensation for misspelling from corporation tax. There will be a review of business rates.
Mental health services will get a £1.25bn in extra funding.
There will be a new inter-city rail franchise for the South West of England