Budget 2015 – A boost for savers

The Chancellor announced a new personal savings allowance which will be introduced from 6/4/16. For a basic rate tax payer, this will mean that they can receive up to £1,000 interest income and pay no tax on it. For higher rate tax payers the allowance will be £500 and there will be no allowance for additional rate payers.

On top of this, greater flexibility was announced in respect of ISAs, allowing savers to withdraw funds and repay them within the year without affecting their annual subscription limit. This is planned for introduction in Autumn this year.

Finally, to help first time buyers, there will be a new Help to Buy ISA. This can be opened with an initial deposit of up to £1,000 and then you can save up to £200 a month.  When you buy your first home in the UK, HMRC will add a bonus of 25% to your savings up to a maximum bonus of £3,000.

If you would like more information on this topic, please contact a member of the tax team at your local office – we would be delighted to advise you.