Budget 2016 - key points for the Police family
What impacts will the latest Budget have on you?
Last week, Chancellor George Osborne delivered his eighth Budget. As well as highlighting the strength of the UK economy compared to other developed economies, he announced a range of new savings initiatives and personal tax changes that will affect Police Officers, staff and their families.
From April 2017, the personal income tax allowance will rise to £11,500, meaning that approximately 31 million working people across the UK will receive a tax cut. The same month will see an increase to the higher rate 40% tax threshold, so only those earning between £45,000 and £150,000 per annum will be affected.
It was also announced that Capital Gains Tax (CGT) will be lowered from 28% to 20%, and from 18% to 10% for basic-rate taxpayers - this will enable people to keep more of the profits they make from assets they sell. However, any gains made on residential property sales do not qualify for the new lower rates.
The Budget contained good news for those earning the National Minimum Wage. Acting on feedback from the Low Pay Commission, the Government has decided that it will raise the minimum wage figure from October 2016.
One of the biggest announcements made last week was about the new Lifetime ISA. From April 2017, it will give individuals aged 18 to 40 the chance to save up to £4,000 per year and the money can then be used as either a retirement fund or to buy a first property.
However, the main advantage is that for every £4 a person saves in a Lifetime ISA, the Government will award them a £1 bonus until they reach the age of 50. This can result in bonus payments amounting to thousands of pounds, depending on how much someone saves. Anyone who is currently saving into a Help-to-Buy ISA will be able to transfer their fund into a Lifetime ISA scheme. More information is available here.
Finally, the annual ISA limit will go up from £15,240 to £20,000 from April 2017, allowing people to maximise the sum they can save in a tax-efficient manner. This is great news for savers who currently utilise their full ISA allowance.
At Police Mutual, we can help you plan for the future. We offer a range of savings and investments products that are tailored to meet the needs of Police Officers, Police staff and their family members, including our recently launched Options ISA.