Budget commentary 2018.

29th October 2018

The Chancellor of the Exchequer, Philip Hammond, has today delivered this year’s Budget Report.

Paul Morton, Investment Planning Director, comments;

“Despite many rumours of further changes to pension allowances (lifetime and annual) and pension tax relief, the Budget was void of any material change.

From a personal financial perspective, the raising of the personal allowance and the higher rate tax threshold will provide a welcome reduction in the income tax burden for many.

Other allowances and reliefs have either been maintained or increased, as planned, in line with inflation.”

Please see our summary below;

Personal Allowance and higher rate threshold

The government will meet its commitment to raise the Personal Allowance to £12,500 from April 2019, one year earlier than planned.

The government will also increase the higher rate tax threshold to £50,000 from April 2019, also one year earlier than planned.

Lifetime allowance for pensions

The lifetime allowance for pension savings will increase in line with CPI for 2019-20, rising to £1,055,000.

Starting rate for savings

The band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2019-20.

Individual Savings Account (ISA) annual subscription limits

The adult ISA annual subscription limit for 2019-20 will remain unchanged at £20,000. The annual subscription limit for Junior ISAs for 2019-20 will be uprated in line with CPI to £4,368.

Child Trust Funds

The government will publish a consultation in 2019 on draft regulations for maturing Child Trust Fund accounts. The annual subscription limit for Child Trust

Funds for 2019-20 will be uprated in line with CPI to £4,368.