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Budget summary – March 2016

This week’s Budget looked as if it would be a difficult one for the Chancellor, with disappointing economic numbers and the need to avoid ruffling feathers ahead of June’s in/out referendum. Nevertheless, Mr Osborne did spring a few surprises, including some tax reductions.

So how does this budget affect you? If you are – or want to be – a saver, then there’s plenty to consider. A new Lifetime ISA will be introduced for the under 40s from 6 April 2017, with a Government bonus of 25%. The overall annual ISA subscription limit (including the Lifetime ISA) will be increased to £20,000 from April 2017.

Other important points included:

  • The opportunity remains to increase pension funding using past unused allowances, between now and 5 April 2016, and beyond to benefit from higher rates of tax relief.
  • Salary sacrifice is also still available – the Government confirmed pension saving can continue to benefit from income tax and national insurance relief when provided through salary sacrifice.
  • The Lifetime Allowance reduction from £1.25m to £1m and the restricted (tapered) annual allowance will come into effect on 6 April 2016 as planned.
  • Higher and basic rates of CGT will be reduced from 28% to 20% and from 18% to 10%, from 6 April 2016 – but not for certain residential property such as buy-to-let and second homes.
  • Employer financed pension advice – the income tax and NICs relief available for employer-arranged pension advice will be increased from £150 to £500 from April 2017, ensuring that the first £500 of any advice received is eligible for the relief.

Click here to download full Budget summary

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Guide: how to… communicate with your pension members

Effective communication of your pension scheme is a large part of getting auto-enrolment right. Delivering the same message to all employees is not necessarily the way to go. To assist you with the communication of your pension scheme, we have provided some key areas to think about, such as:

  • What to consider when segmenting your workforce
  • How to communicate to pension scheme members at the right time in their member lifecycle
  • What topics you should be discussing with your pension members
  • The new pension freedoms and the importance of communicating them

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