Budget 2017: The key measures to watch out for

Philip Hammond 620px

Ahead of the Budget speech at 12.20pm, here are some of the key measures and policy initiatives advisers should be listening out for.

Pensions tax changes

The Government is considering using higher-rate pension tax relief to prop up the social care system, according to the Times.

Hammond could also water down the current triple lock guarantee on the state pension, which pledges that the state pension will increase with either inflation, earnings or 2.5 per cent, whichever is highest.

Social care and healthcare overhaul

This week’s Budget is also expected to unveil Government plans to overhaul social care and healthcare funding and raise tax rates for the self-employed.

Chancellor Philip Hammond will announce a £1.3bn windfall for councils over the next two years and will be found by cutting existing spending, not through taxation.

As well as the extra cash, Hammond will use the Budget speech to announce a review into finding a long-term solution to the issue of social care funding.

Possible options being explored by the Treasury include a ‘care Isa’ that gives consumers a way to save tax-free for their own care.

Self-employed tax

Hammond could also increase tax by 3p on the self-employed, with national insurance rates rising to 12 per cent.

Higher rate threshold tweaks

The Government has pledged to increase the personal allowance by £1,000 to £12,500 and raise the 40p income threshold to £50,000 over the course of the Parliament, though this could happen in the 2017 Autumn Statement.

Positive messages

Hammond is also expected to take a positive stance on the health of Britain’s post-Brexit economy.

The Financial Times reports that the Budget speech will be bolstered by better-than-forecast economic growth and tax take.

Public borrowing has been cut by around £12bn since the 2016 Autumn Statement, leaving the UK’s deficit at 3 per cent of national income.