By Melanie Wright
Here’s our rundown of how the Budget affects your personal finances.
Anyone planning to get on the property ladder will no longer have to pay stamp duty when purchasing a home costing up to £300,000. The usual starting point for stamp duty is £125,000.
First-time buyers purchasing properties costing up to £500,000 won’t have to pay stamp duty on the first £300,000, but those buying properties costing over £500,000 will have to pay usual stamp duty rates. David Hollingworth from mortgage brokers L&C Mortgages said: “A cost saving of up to £5,000 for first time buyers will raise a cheer with those aspiring buyers that are struggling with the challenge of saving a deposit. It may also attract some applause from their parents who are so often called upon to boost the deposit or help with the mortgage.”
There was relatively little tinkering with pensions in the Budget, despite fears that the Chancellor Philip Hammond could restrict tax relief on pension contributions. Under current rules, tax relief means a £100 pension contribution only costs basic-rate taxpayers £80, or higher rate taxpayers just £60.
The State pension will rise by 3% from April, so that pensioners receiving the basic state pension will receive £125.95 a week, an extra £3.65 a week compared to their current weekly payments of £122.30. Those who are entitled to the new state pension will see their pension payments increase by £4.80 a week, from £159.55 to £164.35.
The personal allowance, which is the amount you can earn tax-free each year will increase from £11,500 in the current 2017-18 tax year to £11,850 in the 2018-19 tax year, which begins on April 6. The threshold at which you start paying the higher rate of income tax at 40% will increase from £45,000 to £46,350 from the same date.
The amount you can save into tax-efficient individual savings accounts (ISAs) will remain unchanged at £20,000 in the 2017-18 tax year. You can invest ISA savings in cash, stocks and shares, or peer-to-peer lending through an Innovative Finance ISA. Anna Bowes of savings advice website Savingschampion.co.uk said; “The ISA Allowance was kept at £20,000 in the Budget, but remember this applies across all types of adult ISA and you can put as much or as little of this annual allowance into ISAs in any combination.
“If you want to transfer your money to a different type of ISA, remember not to close the ISA you want to transfer from; simply ask the new provider to deal with the transfer for you, otherwise the tax benefits on the money you are moving will be removed.
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The length of time claimants have to wait to get their universal credit benefit will be reduced from six to five weeks from February. They will also be able to get a full month’s payment as an advance within five days of applying.