For weeks, we’ve seen a large build-up of speculation on what to expect from this year’s Autumn Budget, particularly around pensions – with Chancellor Philip Hammond describing tax relief as “eye wateringly expensive.”
Yet the biggest surprise perhaps ended up being the lack of changes mentioned in Hammond’s Budget delivery. For the moment, this can only be viewed as a positive – as it allows individuals to continue to take advantage of the tax benefits available when contributing into a pension.
Ben Smith, Technical Services Manager: “Amid much speculation in the build-up, no news is good news as pension’s tax relief remains unchanged following the autumn budget.
|Ben Smith, Technical Services Manager|
“However, it is unlikely that this is the last time pension’s tax relief will come under Hammond’s radar. Therefore, it is vital that you take full advantage of the benefits available when saving for retirement.”
What else do we know from the Autumn Budget?
- Personal allowance to increase to £12,500 from £11,850 in April 2019.
- Higher rate tax threshold to increase to £50,000 from £46,350 in April 2019.
- The Lifetime allowance continues to increase with CPI and will be £1,055,000 until tax year.
- ISA allowances remains at £20,000 for now.
Ben: “It is really positive to see the government follow through on their commitment to raising the personal allowance to £12,500 and the higher rate tax threshold to £50,000 a year earlier than planned – saving a typical basic rate tax payer £130 from April 2019.”
While the next Budget is traditionally in May, with Brexit negotiations around the corner Hammond has warned of a second Budget in a matter of weeks (should the government strike a no-deal agreement with the European Union).