Budget 2014: what do the measures mean for you?
19 Mar 2014
Despite highlighting the importance of adhering to the austerity plan, Chancellor George Osborne nevertheless managed to spring some surprises in his 2014 Budget speech, in particular in the form of measures relating to pensions and savings.
An additional increase in the basic income tax personal allowance had been anticipated by many analysts, and the Chancellor confirmed that this will rise to £10,500 from April 2015, coupled with a rise in the higher rate threshold to £42,285.
However, the Chancellor also introduced some sweeping changes to the pension system, announcing that under future plans pensioners will no longer be required to purchase an annuity, but will be given the power to manage their own pension pot.
In addition, a new bond for those aged over 65 will be introduced in January, offering potentially more attractive rates.
Another headline measure will see the existing Individual Savings Account (ISA) replaced by a New ISA (NISA) from July, offering increased flexibility to savers. The NISA will allow individuals to save up to £15,000 in a mix of cash, stocks and shares.
Other personal tax measures include the reduction to zero of the 10p starting rate of tax on savings income, an extension of the Help to Buy scheme, and the introduction of tax-free childcare subsidies worth up to £2,000 for working families.
Meanwhile, news that the Annual Investment Allowance will be increased again has been welcomed by business groups, and will see the limit raised to £500,000 until the end of 2015.
In addition, manufacturers will benefit from a £7bn package aimed at reducing their energy bills, while the Government will double the credit available to exporters and reduce the interest rate charged on the credit by a third.
The Seed Enterprise Investment Scheme has also been made a permanent feature.