View more on these topics

More complexity but little impact

The Chancellor continued the Government’s long-standing approach to fiscal policy by extending the complexity of the personal tax system.

In a return to tax rates last seen in the 1970s, he announced not only the introduction of a 50 per cent headline rate of income tax for people with income over £150,000 but also a 60 per cent marginal rate of tax from April 2010 for those over £100,000.

After substantial speculation on the abolition of higher-rate relief on pension contributions, he settled on applying this red-uction only to the top 1 per cent of taxpayers – those with income over £150,000. It seems likely that this will have limited impact on the UK long-term savings industry as these monies that might otherwise have been invested in pensions will simply find a new home to deliver income in retirement.

Darling also heeded the representations of the investment industry by increasing Isa allowances from £7,200 to £10,200 with effect from October 6, 2009 for those aged 50 and over. This will be unlikely to increase overall savings rates in the short term but instead will facilitate the movement of existing assets to a more tax-favoured environment more quickly.

All this increased complexity in personal financial planning will drive the need for advice and advisers are well placed to capitalise on this demand.

Recommended

Schroders Q1 profits down 54%

Schroders has reported a 54 per cent drop in first quarter pre-tax profits to £35.9m from £77.9m for the three months to March 31.

1

Damage control

Barclays has come clean about its failure to correctly categorise the Aviva global balanced income fund between July and November 2007, but investors say they are still out of pocket.

Inflation forecast for 1% by year-end

Chancellor Alistair Darling says inflation will drop to 1 per cent by the end of this year but he forecast the retail price index measure will drop to -3 per cent by September before reaching 0 per cent next year.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com