The focus of the Chancellor of the Exchequer’s Budget announcement last week was on economic recovery. That’s understandable given the need to chart a way through the pandemic. However, there were some measures that will affect individuals.
There was good news for anyone being helped by the furlough and self-employment income support schemes, which will continue until September, as well as those who receive the Universal Credit uplift, which will also be extended.
National insurance, pension contribution allowances and limits on VAT and inheritance tax are unchanged, while there are small increases to basic and higher-rate tax thresholds for the coming year. However, they will be frozen at those levels until 2026, and that may affect financial planning, particularly concerning pensions.
ISA allowances were also untouched, and the stamp duty holiday on house purchases will remain until July. First-time buyers will also receive help in the form of mortgage guarantees.
Separately, the Treasury has announced that the limit on contactless spending will be hiked from £45 to £100, subject to approval from individual banks.
The expectation now is that inflation will rise over the coming years. That may influence investment decisions, as individuals seek to build in some protection against that increase.
So, while the Budget may not appear to have an immediate impact on your finances, it is worth reviewing current arrangements to ensure you’re maximising tax benefits and building in a safety net against future changes. If you need independent financial advice in Shropshire, give us a call.