Autumn Budget: personal finances
Support for low earners – no real change for others
The Chancellor kicked off his budget announcement telling us that he’ll build an economy fit for a new age of optimism, a word which did a great deal of heavy-lifting during Brexit discussions, though the speech was notable for the absence of the B word.
However, it’s fair to say that it was full to the brim of spending promises, and with the economy in better shape than he probably expected the Chancellor was feeling pretty bullish.
Other than a high profile cut of 3p off a pint and no fuel duty rise, there wasn’t too much on the subject of personal finances.
Perhaps the most significant was the 8% cut in the Universal Credit taper rate from 63p to 55p alongside an increase in work allowances of £500 – an effective tax cut for 1.9 million of the lowest earners.
Also, the 6.6% rise in the National Living Wage to £9.50 will result in about £700 after tax.
Of some concern was the expectation that inflation will rise to 4% this year – it’s more than anticipated and it will certainly have an impact on cash savers unless the Bank of England increases interest rates, which could well be in the pipeline.
There have also been rumours flying around about curbing pensions tax relief for higher rate tax payers, so no news on that front is good news. Also, no changes to IHT and CGT which is positive.
Of course there may be more to come in the budget documents – watch this space!
Keith Brooks is a IFA and Chartered Financial Planner at Aberdein Considine