The final Budget before the General Election is here, and what does it have in store? We’ve seen announcements on pensions, tax, housing and much more that will affect all of us around the country in different ways.
1. Income tax
One big win for many is that the amount you can earn before being taxed – personal tax allowance – was already due to increase from £10,000 to £10,600 from April, and is set to rise further – up to £10,800 next year, and then to £11,000 the year after.
Some people will also benefit from the higher tax rate threshold – in other words, the moment you start paying 40p in the pound – being raised from £42,385 in 2014-15 to £43,300 by 2017-18, although some speculation had suggested it would go as high as £50,000.
2. Tax Returns
Around 11 million of us currently fill in tax returns at the end of the year – for many (4 million according to this) it’s because they are self-employed, or run their own business, but also it can apply to savers, anyone who lets property, and a whole lot more.
The end-year tax return is now to be replaced by real-time online accounts, starting from 2016 and aiming to be completed by 2020. People would be filing accounts throughout the year on an ongoing basis, even via laptop or smartphone, and not have to rush to get it all done by 31 January.
3. ISA for first-time buyers
To try and help first-time home-buyers get on the housing ladder, a new ISA is being launched which will give a £50 bonus for every £200 saved, up to £3000 – payable when the house is bought. It’s available on home purchases of up to £450,000 in London, and up to £250,000 outside London.
4. Pensions & savings
Pension rules have been relaxed allowing savers to cash in their annuities from 2016 without having to pay tax on it. Also, from next year, the Lifetime Allowance – the maximum amount you can save into a pension – will be reduced from £1.25m to £1m.
A new personal savings allowance will be introduced in April 2016, meaning that basic rate tax-payers won’t be taxed on the first £1,000 of their savings income (for higher-rate tax-payers it’ll be £500).
5. And there’s more?
The national minimum wage was confirmed as increasing to £6.70 an hour, with the plan to get it up to £8 an hour by the end of the decade. And state-the-art high-speed broadband is coming to even the remotest areas, as well as funding for free wi-fi in libraries.
And finally? as with recent years, beer duty was cut by 1p a pint, while cider went down by 2p and wine duty was frozen.
6. Getting your own Budget done
Your own credit rating changes along with your own financial behaviour. It plays a major role in the decisions lenders make when you apply for all kinds of credit: whether it’s a mortgage, a credit card, car finance loans or mobile phone contracts.
So understanding your credit report, what’s on it, and the steps you can take to improve it, can help you put yourself in a stronger position when it comes to applying for the credit you want or need. The Experian Credit Score* is a guide to help you understand your Experian Credit Report, and how the way you’ve managed the credit you’ve had in the past might affect applications you’re making now, and can give you an indication of what kind of deal you might get.
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