What The Spring 2014 Budget Means For You
By Chris Perrett March 21, 2014
*Photo Courtesy of HM Treasury
Like all other previous budget statements, speculation was rife in the days leading up to the Spring 2014 Budget Statement released on Wednesday. Would the Chancellor make further changes to personal tax allowance? Would there be a further hike on the cost of petrol?
We were all put out of our misery and there weren’t any huge surprises based on the previous predictions on most aspects, however there were huge changes to pensions and the current system. To cut through the clutter, we’ve created this quick guide to the Spring 2014 Budget Statement so you can see in simple terms what it means for you.
What’s gone up in the Spring 2014 Budget Statement?
- The duty on alcoholic drinks (excluding cider, beer and spirits) will rise by 1.9%, in-line with inflation.
- Smokers will feel it in their back pocket with a further 2% above inflation rise on tobacco duty.
What’s gone down in the Spring 2014 Budget Statement?
- Beer duty has been cut by 1p per pint (which will come as a welcome relief to all pub-goers) and the duty on spirits and ordinary cider has been frozen.
- The planned fuel duty hike due in September has been scrapped.
- A lower rate of air duty will be charged on long-haul flights to the USA – this should help to make the cost of future holidays to America cheaper.
Income Tax:
- The threshold for income tax to kick-in will rise to £10,000 for the 2014-15 tax year, and then up to £10,500 from April 2015. This could help over 280,000 people across the UK to not have to pay any income tax altogether.
- The threshold for the higher 40p income tax rate will rise by £415 in April to £41,865. It will then rise by another 1% to £42,285 in 2015.
Savings:
- Cash and Share ISAs are to be merged into one single New ISA known as a ‘NISA’ (original name!) with a tax-free savings limit of £15,000 per year, which will kick in from the 1st July 2014. The government have estimated this should help to make 6m people better off, as previously only £5,940 could be invested each year into a cash ISA.
- The limit for Child Trust Funds and Junior ISAs has also been lifted up to £4,000 per year, up by 7.5%.
Pensions:
- The tax on cash (above the 25% tax-free lump sum) taken on retirement will now be charged at the standard income tax, down from the current rate of 55%. The total pension savings that you can take as a lump sum has also been raised up to £30,000.
- There’s now no need to buy an annuity has been removed as all tax restrictions on access to pension pots has been removed.
- The government are introducing a ‘New Pensioner Bond’ that will be available from January 2015 to anyone over the age of 65 and allows for up to £10,000 to be saved per bond. The predicted rates are 2.8% for a one-year bond and up to 4% for a three-year bond.
Chris is the Editor of the Savvy Saver Magazine here at iLikeOffers.co.uk. With a keen eye for bargains, Chris helps to hunt down the biggest savings at stores across the UK and to bring you tips and advice on how to save money in your day-to-day life.
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