2014
2014 Budget changes to pensions and savings
Murray McEwan / 0 Comments /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.
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