The Budget: Who are the winners and how will this impact your finances?

WHO ARE THE WINNERS, AND HOW WILL THIS IMPACT YOUR FINANCES?

Whilst the chancellor has made reforms to all areas of business, and supporting inward investment, the winners in this Budget seem to be the Earners, Savers and Pensioners.  Director of Searchlight Investments, Richard Pipe comments on today’s budget:

 “I am delighted with a budget that lets our clients keep more of what they earn, which they can spend as they wish or preferably talk to Searchlight Investments about investing it!”

THE WINNERS

EARNERS

  • The increase in the personal allowance to £10,500 is most welcome, as is the increase in the 40% threshold.

PENSIONERS

Over recent years, there has been non-stop change to pensions rules and most of the changes have been unwelcome and unnecessarily complicated.  This time, it appears that there is some positive news on drawdown affecting many of our pension clients. Searchlight Investments will check out the small print over the coming days and then contact any clients affected by the changes.

KEY POINTS

  • Increased Pension Flexibility – The government will legislate to allow those with a defined contribution pension to draw down an unlimited sum from it after age 55 from April 2015, subject to their marginal rate of income tax.
  • Pensions flexibility: capped drawdown – From 27 March 2014, the government will allow people with defined contribution pension wealth more flexibility to access their savings by increasing the capped drawdown limit to 150% of an equivalent annuity. (Finance Bill 2014).
  • There will be no obligation to buy an annuity; Searchlight Investments is supportive of any improvements to the flexibility of pension planning.

SAVERS

  • ISAs will be made simpler. Cash and share ISAs to merge
  • There will be a further rise in the ISA limit from July
  • Searchlight Investments will be contacting all our clients over the next few months to ensure that they know how to take advantage of the new limits.  We are broadly supportive of the simplification of ISA rules.
  • The low income savers 10p rate to be abolished
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