Savings & Investments

Savings for individuals

Four new measures have been introduced to reduce the tax liabilities for savers.

 

Access to annuities

The government will legislate from April 2016 to allow people who are already receiving income from an annuity to agree with their annuity provider to assign their annuity income to a third party in exchange for a lump sum or an alternative retirement product.

Rather than being charged the current punitive tax rate of at least 55%, tax will be charged at the individual’s marginal tax rate.

 

Flexible ISA

For 2015/16 individuals are able to invest up to £15,240 into an ISA.  From Autumn 2015 individuals will be able to withdraw and replace money from their cash ISA in-year without it counting towards their annual ISA subscription limit.

 

Help to Buy ISA

First time buyers will be able to save up to £200 a month towards their first home with a Help to Buy ISA.  There is also an opportunity to deposit £1,000 when the account is first opened.  The government will boost those savings by 25% up to a maximum of £3,000.  The bonus will be calculated and paid when purchasing the first home and is payable on homes up to £450k in London and up to £250k outside London.  Accounts are limited to one per person rather than one per home, so those buying together can both receive a bonus.  There is a minimum age requirement, so only people aged 16 and above can open the account.

The government intends the scheme to be available from Autumn 2015.

It will only be possible to subscribe to one cash ISA per tax year.

 

Personal Savings Allowance

The government will introduce an allowance from 6 April 2016 to remove tax on up to £1,000 of savings income for basic rate taxpayers and up to £500 for higher rate taxpayers. Additional rate taxpayers will not receive an allowance.

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Feb 23

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