Newsflash!

Budget March 2012

The Economy

The Independent Office for Budget Responsibility (OBR) has revised upwards the UK forecast for 2012 from 0.7% to 0.8%.   The forecast for 2013 is 2%, for 2014 2.7% and for 2015/16 3%.   UK inflation is set to fall from 2.8% for 2012 to 1.9% for 2013.

Pensions

WEF April 2013 a new single-tier state pension will be introduced to be set above the means test at a minimum of £140 a week.   The Government is due to examine linking the state pensions age to life expectancy.

Child Benefit

This will be phased out when someone in a household has an income of more than £50,000, decreasing by 1% for every £100 earned over £50,000.   Only those earning more than £60,000 will lose the benefit completely.

Tax

WEF 21 March 2012

  • there is a new 7% stamp duty on properties worth more than £2m
  • there are also plans (15% stamp duty rate on properties worth over £2m within corporate envelopes) to clamp down on stamp duty avoidance by using companies to buy expensive properties.

WEF April 2013

  • the 50p top rate of tax levied on earnings of £150,000 or more will be cut to 45p
  • the personal income tax allowance will be increased to £9,205
  • age-related income tax allowances will be removed for new pensioners and replaced with the same personal allowance as the rest of the UK
  • there will be a new cap on tax reliefs set at 25% of total income for anyone claiming more than £50,000 in a year
  • Corporation tax will be reduced to 24%, with a further 1% reduction in 2013 and in 2014.

There will also be a simplified tax return process for small firms with a turnover of up to £77,000.

WEF April 2013/14

  • the higher income tax band will be reduced from £42,475 to £41,450.

 

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Beware of saving account restrictions - make sure you read the small print

Wednesday, 07 October 2009 12:19
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Recent figures from the Office for National Statistics show British households were saving the largest proportion of their income for six years.  Selecting the right savings account can improve greatly the returns you receive, but make sure you check more than just the headline rate of interest.

Whilst interest rates are important it is essential to look out for any restrictions, although just because an account has restrictions it doesn't mean that it won't suit you.  How you intend to use the account is important.  An account that applies penalties for withdrawals could suit you if you intend to tie up your cash for the long term, but would not be appropriate if you require regular access to your cash.  So take time to consider the minutiae of an account and make sure you understand any restrictions.

Here are a few restrictions to look out for:

 

Access restrictions:  some savings accounts require a minimum amount of notice before funds can be released.

Withdrawal restrictions: some instant access savings accounts limit the number of withdrawals permitted.  Making additional withdrawals may mean a reduced amount of interest or none at all.

Balance restrictions:  some accounts have minimum balance requirements, so if your balance goes below a certain level, the interest rate will also decrease.

Deposit restrictions:  some regular savings accounts require a minimum deposit to be made into an account each month.  If you don't save the specified amount your interest rate may be reduced or the account may be closed altogether.

Introductory bonus restrictions:  the interest rate of some savings accounts includes an introductory bonus.  If so, it is likely that the rate will go down after a fixed period (i.e. six months or one year).  You will need then to be prepared to change again.

Online accounts normally pay higher rates.

Don't forget that from 6 October 2009 the ISA allowance has risen from £7,200 to £10,200 for anyone over the age of 50.  You can either put the whole amount into stocks and shares or up to half, £5,100, in cash.

Providers have launched a range of cash ISA accounts to attract the over-fifties, but some are offering poorer rates than their mainstream deals.  So beware of two tier accounts!  When taking out Cash ISAs check the details of deals aimed particurlarly for the over fifties.

 

Last Updated on Tuesday, 10 November 2009 14:09