The Chancellor of the Exchequer, Philip Hammond, has today delivered this year’s second Budget Report.
Please see our summary below
- From April 2018, the personal allowance will increase to £11,850 and the higher rate threshold to £46,350.
- The ISA annual subscription limit for 2018-19 will remain unchanged at £20,000. The annual subscription limit for Junior ISAs and Child Trust Funds for 2018-19 will be uprated in line with CPI to £4,260.
- Employees on maternity and parental leave will be able to take up to a 12 month pause from saving into their Save As You Earn employee share scheme, increased from 6 months currently. The change will take effect from 6 April 2018.
- The lifetime allowance for pension savings will increase in line with CPI, rising to £1,030,000 for 2018-19.
Jonathan Watts-Lay, Director, WEALTH at work, a leading provider of financial education, guidance and advice in the workplace, comments: “As expected it was confirmed that the lifetime allowance for pension savings will increase in line with CPI, rising to £1,030,000 for 2018-19.
“It’s important that employees understand the LTA rules and take a view of their situation so that it doesn’t come as a nasty surprise.
“Many employers now offer a cash alternative to remaining in the pension scheme but unlike a pension contribution, the increase in pay is subject to income tax and national insurance.
“Alternatively, employees could look at diverting contributions into another type of tax efficient savings vehicle, an ISA for example which is remaining unchanged at a limit of £20,000.
“Many employees now look at their workplace to offer a variety of workplace savings schemes alongside pensions. It’s good to see that many employers are now starting to adapt their reward and remuneration packages for employees, to offer them more flexible and tax-efficient solutions for saving.”