phone icon0113 243 5693



2014 Budget changes to pensions and savings


Changes to Pensions and ISAs

In the recent budget Chancellor of the Exchequer George Osborne announced far reaching changes to the way pension benefits may be taken.  He also announced the development of  Individual Savings Accounts (‘ISAs’)  into new ISAs ( or ‘NISAs’).

Rather than add yet another explanation of these changes to the post-budget noise, we would direct you to two excellent documents produced by the Treasury itself which outline the changes in a simple way.  These can be accessed from the following links:

(Treasury fact sheet on pensions flexibility)  – Note that there will be a consultative period on the implementation of these  pension changes which are due to take effect in 2015.

(Treasury NISA fact sheet) – These should take effect fully in July 2015, so there are transitional rules until then.

Here are some other pensions and savings headlines from the budget:

New Savings for the Over-65 savers

Retired savers, struggling to find places where their money can keep pace with inflation, will appreciate the introduction in January 2015 of 2 new fixed-rate savings bonds.  Whilst the details will not be finalised until the Autumn, it is expected that the rates being offered will be 2.8% gross/annual equivalent rate (AER) on a one year bond and 4.0% gross/AER on a three year bond under current market conditions, with an investment limit of £10,000 per product. It is also expected that these will be taxed in line with all other savings income.

Topping up the State Pension

Pensioners will be able to top up their Additional State Pension by means of a new scheme of Voluntary National Contributions (VNCs).

Abolition of 10% rate of tax on savings income for low earners

This will increase the amount of bank interest low income savers can receive before paying tax from £2,880 to £5,000 pa.


No comments so far!


Leave a Comment