Relief as chancellor resists pension changes
Finance expert Andrew Edwards assesses Philip Hammond’s Budget F
inancial advisers and other retirement experts breathed a collective sigh of relief as Philip Hammond managed
to resist any temptation to tinker with the pension regime in his 2017 Autumn Budget when he did not utter a single word on pensions. Some of the key points in the 2018/19 tax year as a result of the Budget, and from measures already announced, are:
Pensions
The pension lifetime allowance will rise to £1,030,000 and reassuringly there are no changes to the pensions funding limits – i.e. the annual allowance remains at £40,000 and will not be tapered until adjusted income exceeds £150,000.
Income tax The personal allowance and higher rate threshold will increase to
Inheritance tax As expected, the IHT nil rate band will remain at £325,000 until April 2021 and the residence nil rate band will increase from £100,000 to £125,000. In total, that will mean that, from April, couples can leave assets up to £900,000 to future generations free of IHT.
ISAs
Annual ISA limits stay at £20,000 per person, with a range of different ISAs to choose from. Each has its own rules and limits and is designed for different purposes, whether that’s medium or long-term investing, or saving for a house deposit.
State Pensions The basic State Pension will increase in April 2018 by 3% as a result of the triple lock. This will mean an increase of £3.65 per week to £125.95 per week for the full basic State Pension. The new State Pension will also be increased by the triple lock, resulting in an increase of £4.80 per week to £164.35 per week for the full new State Pension.
LSE CHIEF ROLET FORCED OUT EARLIER THAN EXPECTED
In a move that surprised experts, Xavier Rolet stepped down with immediate effect at the end
of November from his role as CEO of the London Stock Exchange. He was due to leave next year but, as pressures mounted, that became untenable with Bank of England Governor Mark Carney saying that the situation needed to be cleared up as soon as possible. According to Bloomberg, Rolet resigned
dofonline.co.uk
following a request from the board. TCI Fund Management has claimed Rolet was pushed out and demanded he stay, asking chairman Donald Brydon to go instead. The board stood its ground, and reportedly planned to release a potentially negative dossier on Rolet to defend against the accusation by TCI chief Christopher Hohn. Rolet became LSE CEO in May 2009
aſter a career in trading that started in the 1980s at Goldman Sachs. Under Rolet, LSE became the world’s largest clearinghouse while the stock has risen almost six fold.
£11,850 and £46,350. The income tax rates and bands which will apply to Scottish taxpayers will be announced in the Scottish Budget in December. The dividend allowance will be cut to £2,000 as already announced. In particular, this will hit small and medium-sized business owners who take their profits as a dividend. Employer pension contributions will become an even more attractive way of extracting profits from a business.
BESToftheREST What the top columnists are
saying about Brexit Britain A TALE OF TWO PMs
It is striking how many similarities Edward Heath had with Theresa May. Both PMs were/are uncomfortable on the campaign trail... both talked of relaunching their party’s political philosophies but struggled to turn their principles into practical policy. Both called early elections and suffered disappointing results. And both have been overwhelmed by turbulent times... But there is a striking difference; the financial markets. Heath presided over a collapsing stockmarket and soaring bond yields; May has seen a slump in the £ but the FTSE 100 has hit record highs and the government can borrow at 1.3% for ten years. One wonders, however, just what would happen if investors thought Corbyn would actually get into power. Buttonwood,
Economist.com
A BUDGET THAT ADDS UP I’m not going to complain about the Budget. It wasn’t imaginative, interesting or particularly funny, and we won’t be able to look back on it in a decade as representing any kind of turning point in the miserable state of the UK’s public finances but the chancellor did do something of which I approve. There will be, said Philip Hammond, “more maths for everyone”. His £177m plan to encourage schools to work harder on numeracy includes some extra funding to push Singapore-style maths teaching into primary schools; a bung of £600 for schools for every additional pupil nudged into taking A-levels in maths, further maths or core maths; and a call for more applications for new specialist maths schools in England. This is all excellent news. Merryn Somerset Webb, MoneyWeek
£50bn BILL WINS CITY APPROVAL Well at least the City folks like it. The pound shot up in value on the news that Britain is ready to settle its European bill to the tune of £50bn or more, as investors dared to glimpse some light at the end of the Brexit tunnel. Their hope is the same as Theresa May’s: that once Britain has agreed to pay up in full – including for liabilities stretching decades into the future – the remaining 27 EU leaders will allow the Brexit talks to move away, at last, from the terms of the divorce settlement, and on to the future relationship between the UK and the rest of Europe. Jonathan Freedland, the guardian
BREXIT UNITED It was always going to be a contentious issue, but the odd thing about the so-called “Brexit bill” is how it unites so many Leavers and Remainers in anger. Hardline Leavers are outraged at having to pay such a whopping “bill” for leaving for the EU. According to this school of thought, we are being punished and blackmailed into handing over cash for vague promises of trade talks. Ben Kelly, Daily Telegraph
DIRECTOR OF FINANCE
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