Last week marked one of the biggest dates in the financial calendar, in which Conservative Chancellor George Osborne delivered the 2015 Budget.
As a pre-election rally, the Chancellor’s speech to the House of Commons on Wednesday the 18th of March included a recap of what has been done in the last five years. “Today I report on a Britain that is growing, creating jobs and paying its way” were the Chancellor’s opening words. But despite the relevance of the Budget as a pivotal role in the up-coming election, what exactly does it mean for us?
The Budget that “works for you”
Whilst last year’s Budget was a revolution for pensioners, it seems that this year’s is much the same, but for savers. Billed as the Budget that “works for you”, the Chancellor announced the promise of tax-free savings and more flexible ISAs.
Bearing in mind that many of the changes proposed by the Conservative government depend on being re-elected in May – one of the biggest features of the 2015 Budget is the new personal saving allowance.
New personal savings allowance
From April 2016, a new personal savings allowance will reward savers by not taxing the first £1,000 of income for basic-rate taxpayers. Higher rate taxpayers though, will only receive a £500 personal saving allowance, whilst those who pay the top rate will not benefit at all.
“Help to Buy”
One of the other big announcements was a new “Help to Buy” ISA scheme – which will help first-time buyers to get onto the property ladder. Essentially, for every £200 saved by a first-time buyer, the Government will add £50 – allowing new home owners to save for a mortgage from their pre-tax income.
Additionally, according to the 2015 Budget, ISAs will be more flexible. Savers will now be able to withdraw and replace money in the same tax year without losing any of their tax-free allowance. This will mean more options for savers and flexibility in the long run.
Undoubtedly, this year’s Budget has revealed some significant new changes when it comes to saving. First time buyers and basic-rate taxpayers will no doubt benefit greatly. But with interest rates still at an all-time low, it’s hard not to be at least a little wary.
About the Author
Having worked in financial services for over 36 years, Andrew Darling is a specialist in invoice discounting, factoring and trade finance solutions. He currently manages the development of business with higher turnover companies at Bibby Financial Services, specialising in corporate finance for businesses with turnover of £5 million or more.