James Brokenshire has welcomed the changes set out in the Chancellor’s budget statement, which will support savers, reform pensions, provide further support for Britain’s businesses and help people keep more of their earnings.
Importantly, the changes will help savers, many of whom have had a difficult time since the recession as low interest rates continue to prevent their savings from blossoming. ISAs will be simplified by merging the cash and stocks varities and increasing the annual limit to £15,000, allowing savers to invest more money tax free. The 10p rate of tax on savings income will also be abolished, benefiting an estimated 1.5million savers across the country.
In addition, it was announced that the Personal Tax Allowance, already set to increase from April of this year, will increase again to £10,500 from next April, providing a tax cut for 25.4million people and allowing a typical taxpayer to keep an extra £800 in their pocket a year. Those looking to buy a home will also be able to benefit from the Help to Buy scheme until the end of the decade, providing an additional120,000 new homes nationwide.
The Chancellor also pledged further support for pensioners, giving them more control and flexibility over how they draw down their pensions. People will no longer be forced to buy annuities if they don’t want to, nor pay the punitive 55% rate of tax for those who take more of their tax-free lump sum, paying only 25% instead.
Additionally, the alcohol duty escalator will also be scrapped and, for the second year in a row, the price of a pint of beer will be reduced by 1p.
Commenting following the Chancellor’s statement, James said: “This budget will provide welcome support for savers and pensioners. The increase in the Personal Tax Allowance will also mean that people will keep more of their hard-earned cash.”
“Whilst the deficit is falling and the economy is recovering, there is still more work to be done in order to ensure a sustained recovery. The Chancellor is right to focus on supporting jobs and growth and getting the public finances back on track. The budget will help support the long term economic plan.”