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Budget 2015

Budget 2015 - what you need to know

Are you going to be better or worse off?

With just 50 days until the General Election, there were rumours this Budget could be a ‘giveaway’ with policies and cuts to attract voters.

In the end, there wasn’t much that will happen straight away, but we’ve broken down the announcements that could affect you. Here’s what you need to know about the 2015 Budget.

 

If you’re earning over £10,600

What: The tax-free personal allowance (the amount you earn before paying any income tax) is already set to rise to £10,600 from April this year. The chancellor announced that it will rise to £10,800 in 2016 and £11,000 in 2017.  

The threshold for 40% tax rate will also rise from the 2015/16 total of £42,385. It will be £42,700 in 2016/17. It will go up again to £43,000 in 2017/18.

When: In April 2016 and again in April 2017.

 

If you’re low paid or an apprentice

What: The National Minimum Wage will rise to £6.70 this Autumn (up 20p) and will be over £8.00 by the end of the decade. There will also be an increase in apprentice rate by 57p per hour to £3.30.

When: 1 October 2015.

 

If you fill in a self-assessment tax return

What: The annual tax return will also be replaced with a digital tax account where your tax affairs will be automatically uploaded.

When: Over the course of the next Parliament, with further details to be announced later in 2015.

 

If you’re self-employed

What: The government will abolish Class 2 National Insurance Contributions (NIC). They will also reform Class 4 NIC and introduce a new contributory benefit test. Both of these types of National Insurance are for self-employed people. Class 2 is if your profits are more than £5,885 a year. Class 4 National Insurance is if your profits are more than £7,956 a year.

When: In the next Parliament.

 

If you’re married

What: The marriage allowance, which starts this April, lets married couples and those in civil partnerships transfer £1,060 of their personal allowance. This will increase to £1,100 from April next year.

When: April 2016.

 

If you’ve got savings

What: Unless your money is in an ISA, any interest you earn is currently taxed. But from April 2016 there will be a new personal savings allowance which will let you earn £1,000 in interest tax-free. If you are a higher (40%) rate payer, that goes down to £500.

When: April 2016.

 

If you have an ISA

What: ISAs - where you save money tax-free - will be more flexible. You’ll now be able to withdraw money from your ISA and put it back in without it counting to your annual ISA allowance.

When: Autumn 2015.

 

If you’re a first-time buyer

What: A new Help to Buy ISA will be available for first-time homebuyers. You’ll be able to deposit up to £1,000, then pay up to £200 a month. The government will then top up your savings by 25% when you buy a home, up to a maximum of £3,000. You’ll also be able to earn tax free interest on your savings as with a standard ISA.

These new ISAs will be limited to one per person rather than one per house.

When: Autumn 2015.

If you’re already retired

What: In the new pension rules announced last year, 5 million existing pensioners were excluded from the changes. Now, existing pensioners will also have the ability to sell their annuity and take a cash lump sum.

When: April 2016.

 

If you have (or will have) a pension pot of more than £1m

What: There will be a cut to the lifetime allowance for pensions from £1.25m to £1m. The lifetime allowance is a limit on the value of funds from your pension schemes that can be paid out without triggering an extra tax charge.

When: April 2016, then it will rise with inflation from 2018.

 

 

 

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  • Robert Frew / 8 July 2015

    Where is the 12 Billion pounds savings coming from?

    Everything I have read indicates positives, a tad confused.!!!

  • bethany walker / 25 March 2015

    I'm feeling positive. As a student my financial capability is always a constant worry and i'm glad I have a great university which helps me in any way possible.

  • Mrs G Bengio / 21 March 2015

    Very good as regarding the Isa, being able to take money out & then put it back

  • Maurice Byham / 20 March 2015

    It all sounds positive but if only the tax free svings element started sooner as I have been on pension for ten years. No further mention of inheritance tax changes that were forcast before the budget.

  • glynis / 20 March 2015

    Nothing there about people on disability benefits does nothing for me

  • Mrs Rita Ann Brett / 20 March 2015

    I am a disabled pensioner, my husband worked since he was 14 years old, he paid in for his private pension also serps but lost his life age 67, I needed to pay our mortgage off but you couldnt even leave me enough to do that, you unfairly had every penny, leaving me nothing,how do you get away with it, it's wrong, it's robbery,yours truthfully.

  • Ann / 20 March 2015

    Why set targets for 2016 and 2017 when parties may change - 'stick to 'the now'
    Good to help first time buyers more.
    Budget was only 'safe'.

  • Di Feltell / 19 March 2015

    Well I am not sure that the rules on Tax Free savings is clear. Do you get £1000 interest tax free per person from 6/4/2016 irrespective of your income eg £20,000 pa if a basic rate taxpayer. Conflicting messages clarify please

  • Sarah Quick / 19 March 2015

    Nuffink, nuffink, nuffink

  • Maureen Fullick / 19 March 2015

    As both my husband and I have been drawing on our annuitys for several years they would'nt be worth much on the open market i fear. What I fail to grasp is.......What happens when there is no more money to draw down for those pensioners who take their money out. Does the government have to supply them with benefits?

  • mervyn williams / 19 March 2015

    Nothing for the state pensioner, in fact my housing benefit has been cut, so much for this Government looking after the pensioners. I know what I and no doubt many others in my position will be doing on election day. Plus the fact that I am a carer for my wife and cannot get a carers allowance.

  • giancarlo / 19 March 2015

    yes it has been a fair way of describing the budget,pity you could have gone more in details ,but generally very good.

  • Peter Webb / 19 March 2015

    My wife and I receive joint Pension Credit and don't think the budget has announced any changes to this. Am I right?

  • peter barnard / 19 March 2015

    we have been squeezed for 5 years. now there is an election in may all of a sudden there is money available. but why is there little happening until april 2016?plenty of time for the government to change their mind and say they can not affoard changes.

  • Mrs Linda Heitman / 19 March 2015

    I am pleased that people that have already retired with pension annuity's will now be able to take lump sums.

  • JaxFrost / 18 March 2015

    This is an excellent précis. Tweeted!

  • c nolan / 18 March 2015

    As usual pensioners who worked hard all their life have been left out