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| Autumn Statement: So what difference will it really make to your finances? | |
| (about 9 hours later) | |
| There was good news for all workers in one sense in today’s Autumn Statement in that the £100 increase in the personal tax allowance was also extended to higher-rate taxpayers. But otherwise various groups will have less to cheer, as our round-up reveals. | There was good news for all workers in one sense in today’s Autumn Statement in that the £100 increase in the personal tax allowance was also extended to higher-rate taxpayers. But otherwise various groups will have less to cheer, as our round-up reveals. |
| Older people with savings and no plans to move home will benefit the most. But Londoners planning to buy expensive properties will be cursing the Chancellor most loudly today. | Older people with savings and no plans to move home will benefit the most. But Londoners planning to buy expensive properties will be cursing the Chancellor most loudly today. |
| Many of our groups will suffer – or benefit – roughly the same. But most have been promised more in the future in what was clearly a vote-grabbing Autumn Statement. | Many of our groups will suffer – or benefit – roughly the same. But most have been promised more in the future in what was clearly a vote-grabbing Autumn Statement. |
| Single person | Single person |
| It was pleasing news for all workers that income tax personal allowances will rise to £10,600 from April. Originally the plan was to raise it to £10,500 but the Chancellor – presumably in a pre-election fever – managed to find a little extra cash down the back of the fiscal sofa. | It was pleasing news for all workers that income tax personal allowances will rise to £10,600 from April. Originally the plan was to raise it to £10,500 but the Chancellor – presumably in a pre-election fever – managed to find a little extra cash down the back of the fiscal sofa. |
| Meanwhile, those running a car will be relieved that the recent fall in pump prices has not tempted Mr Osborne to take more in tax, as the recent freeze in fuel duty will continue for another year. | Meanwhile, those running a car will be relieved that the recent fall in pump prices has not tempted Mr Osborne to take more in tax, as the recent freeze in fuel duty will continue for another year. |
| The headline-grabbing stamp duty reforms will make it cheaper for a single person to get on the property ladder. Those at the lower end of the market will feel the benefits the most. Properties under £125,000 are still exempt from stamp duty but those above that threshold will have to pay only 2 per cent on an amount higher than £125,000. | The headline-grabbing stamp duty reforms will make it cheaper for a single person to get on the property ladder. Those at the lower end of the market will feel the benefits the most. Properties under £125,000 are still exempt from stamp duty but those above that threshold will have to pay only 2 per cent on an amount higher than £125,000. |
| Consequently a property bought for £200,000 – roughly the average price of a typical first-time buyer home – will now attract a stamp duty charge of £1,500, which would have been £2,000 under the old system. | Consequently a property bought for £200,000 – roughly the average price of a typical first-time buyer home – will now attract a stamp duty charge of £1,500, which would have been £2,000 under the old system. |
| If you exchanged on your property before today but complete today or after you can choose whether the old or new rules apply. If you’re buying an expensive home – £935,000 or more – you’d be better off using the old rules. | If you exchanged on your property before today but complete today or after you can choose whether the old or new rules apply. If you’re buying an expensive home – £935,000 or more – you’d be better off using the old rules. |
| However, if you get benefits then you may find times get even tougher in the future as the Chancellor has frozen working-age benefits as part of his much-heralded welfare cap. | However, if you get benefits then you may find times get even tougher in the future as the Chancellor has frozen working-age benefits as part of his much-heralded welfare cap. |
| The stamp duty reforms will reduce the cost of moving in the case of 98 per cent of sales, reckoned the Chancellor. | The stamp duty reforms will reduce the cost of moving in the case of 98 per cent of sales, reckoned the Chancellor. |
| National insurance for apprenticeships are being frozen which should improve access to work and training. | National insurance for apprenticeships are being frozen which should improve access to work and training. |
| Meanwhile, there was an additional £3m announced to combat the menace of employers paying below the minimum wage. | Meanwhile, there was an additional £3m announced to combat the menace of employers paying below the minimum wage. |
| If you’re a carer, there was some good news. The carer’s allowance earnings limit will increase in April 2015 from £102 to £110 per week. | If you’re a carer, there was some good news. The carer’s allowance earnings limit will increase in April 2015 from £102 to £110 per week. |
| Similarly, households that employ a carer will benefit from an extension of the £2,000 annual national insurance contributions employment allowance from next April. It will mean that care workers can earn up to £22,500 without having to pay NICs. | Similarly, households that employ a carer will benefit from an extension of the £2,000 annual national insurance contributions employment allowance from next April. It will mean that care workers can earn up to £22,500 without having to pay NICs. |
| Poor family | Poor family |
| George Osborne gave with one hand but potentially took away with another if you’re a hard-up family with a couple of kids. | George Osborne gave with one hand but potentially took away with another if you’re a hard-up family with a couple of kids. |
| The good news is that working families on low incomes will benefit from an increase in the personal allowance from next April. | The good news is that working families on low incomes will benefit from an increase in the personal allowance from next April. |
| It had been planned that the allowance would rise to £10,500 but a further £100 will be added to increase it to £10,600. The Chancellor also promised jam tomorrow by saying that the personal allowance would rise to £12,500 if the Tories win the general election. That would mean that no one on the minimum wage would pay income tax, he claimed. | It had been planned that the allowance would rise to £10,500 but a further £100 will be added to increase it to £10,600. The Chancellor also promised jam tomorrow by saying that the personal allowance would rise to £12,500 if the Tories win the general election. That would mean that no one on the minimum wage would pay income tax, he claimed. |
| However, those families getting workplace benefits will have less to cheer about. As part of a further £1bn in welfare savings, working-age benefits will be frozen for a further two years. What’s more, the Chancellor said that tax credits would be reduced where it was considered that overpayments are likely to be “certain”. | However, those families getting workplace benefits will have less to cheer about. As part of a further £1bn in welfare savings, working-age benefits will be frozen for a further two years. What’s more, the Chancellor said that tax credits would be reduced where it was considered that overpayments are likely to be “certain”. |
| Middle-wage family | Middle-wage family |
| The annual summer holiday is going to get a cheaper. Air passenger tax was already set to be abolished for children under 12 from next May. However, from March 2016 children under 16 will also be exempt. | The annual summer holiday is going to get a cheaper. Air passenger tax was already set to be abolished for children under 12 from next May. However, from March 2016 children under 16 will also be exempt. |
| This comes on top of a previous commitment to cut the rate of APT on the longest-haul flights to £71 per passenger from £97. A family of four flying to Australia could save more than £200 through the changes. | This comes on top of a previous commitment to cut the rate of APT on the longest-haul flights to £71 per passenger from £97. A family of four flying to Australia could save more than £200 through the changes. |
| As for income tax, the first rise for a few years in the personal allowance for those paying the higher 40 per cent rate will be welcome. | As for income tax, the first rise for a few years in the personal allowance for those paying the higher 40 per cent rate will be welcome. |
| The amount that can be earned before 40 per cent becomes payable will rise from £41,865 to £42,385. On top of that, the Chancellor also signalled that after the election he wanted to see the 40 per cent income tax threshold rise to £50,000 by 2020. | The amount that can be earned before 40 per cent becomes payable will rise from £41,865 to £42,385. On top of that, the Chancellor also signalled that after the election he wanted to see the 40 per cent income tax threshold rise to £50,000 by 2020. |
| Married, no kids | Married, no kids |
| Married couples with money to squirrel away will be cheered by the increase in Individual Savings Accounts (Isa) limits. | Married couples with money to squirrel away will be cheered by the increase in Individual Savings Accounts (Isa) limits. |
| Last summer the amount you could put in a tax-free Isa leapt up to £15,000 a year. From April the limit will increase again to £15,240, in line with inflation. On top of that, for the first time married couples will be able to inherit cash in an Isa and retain its tax-free status. | Last summer the amount you could put in a tax-free Isa leapt up to £15,000 a year. From April the limit will increase again to £15,240, in line with inflation. On top of that, for the first time married couples will be able to inherit cash in an Isa and retain its tax-free status. |
| Single parents | Single parents |
| Working single parents will be able to earn more from April before they are liable for income tax as the income tax threshold will rise to £10,600. | Working single parents will be able to earn more from April before they are liable for income tax as the income tax threshold will rise to £10,600. |
| Those parents in receipt of benefits, though, will be in for a harder time as a further £1bn is lopped off the nation’s welfare bill. As a result, working-age benefits will be frozen for two years. | Those parents in receipt of benefits, though, will be in for a harder time as a further £1bn is lopped off the nation’s welfare bill. As a result, working-age benefits will be frozen for two years. |
| Well-off family | Well-off family |
| There was good news for your savings and holidays in the Chancellor’s statement, but potentially bad news if you’re planning to move home soon, depending on the value of your property. | There was good news for your savings and holidays in the Chancellor’s statement, but potentially bad news if you’re planning to move home soon, depending on the value of your property. |
| The good news? You can now transfer any saving you have in a tax-free Isa between partners and retain the tax-free status. The Chancellor also scrapped the 55 per cent “death tax” that currently applies when you pass an unused pension pot on to your loved ones, which could mean a substantial saving in the future. | The good news? You can now transfer any saving you have in a tax-free Isa between partners and retain the tax-free status. The Chancellor also scrapped the 55 per cent “death tax” that currently applies when you pass an unused pension pot on to your loved ones, which could mean a substantial saving in the future. |
| But if you’re moving home any time soon, you will pay more stamp duty | But if you’re moving home any time soon, you will pay more stamp duty |
| Pensioners | Pensioners |
| The Chancellor’s main hand-out was aimed at older people. The most significant move which should help the most was the scrapping of the 55 per cent “death tax” on unused pensions. | The Chancellor’s main hand-out was aimed at older people. The most significant move which should help the most was the scrapping of the 55 per cent “death tax” on unused pensions. |
| But the new rule which allows Isa savings to be transferred to partners and retain their tax-free status will be of great benefit to those with a nest-egg. | But the new rule which allows Isa savings to be transferred to partners and retain their tax-free status will be of great benefit to those with a nest-egg. |
| If you’re planning to downsize your home any time soon then the stamp duty reforms may also please you, as long as your new home cost less than £935,000. All in all, you have most to cheer for Mr Osborne’s vote-grabbing Autumn Statement. | If you’re planning to downsize your home any time soon then the stamp duty reforms may also please you, as long as your new home cost less than £935,000. All in all, you have most to cheer for Mr Osborne’s vote-grabbing Autumn Statement. |
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