On October 29th, Philip Hammond shared the 2019 Budget with the public. John Whitehead, MD of Alan Boswell Financial Planners, has reviewed the budget and gives the top 5 takeaways for savers.
It’s easier to open Premium Bonds, and to find out if you’ve won
You now only need £25 to open up a Premium Bond – that’s down from £100. Alongside that, a new app will be launched that allows savers to check if they’ve struck lucky with their bonds and are in-line to receive some money. Plus, children can be gifted Premium Bonds by people other than parents and grandparents now, opening it up to other family members, family friends and godparents to name a few.
ISAs – good news for young savers
From April 2019, anyone under 18 can now save more money with a Junior ISA as the cap increases to £4,368, in line with inflation. However, there’s no change to the maximum amount of money you’re allowed to save in a regular ISA – it’s £20,000, and it’s the third year without change.
More people can benefit from stamp duty relief
Last year, Philip Hammond increased the limit for stamp duty exemption for first-time buyers from £125,000 to £300,000. Kevin Roberts, director of Legal and General Mortgage Club, said 121,000 first-time buyers benefitted from the increased limit. This year, it’s more good news as the cap has been pushed to £500,000 and includes people purchasing shared-equity properties. This change comes into effect immediately, and will be backdated to the last budget. So, if you fit into either of those new categories and purchased your property in the last 12 months (since November 2017), you’ll be able to get your money back.
Help to Buy scheme extended
Previously due to end in 2021, the Government-backed equity loan scheme will now run until 2023. It helps first-time buyers to get onto the property ladder by offering a Government loan of up to 20% of the property value, allowing them to secure a smaller mortgage. Buyers have to start paying back the interest on the loan after five years.
Personal tax-free allowance increased
These changes benefit people paying basic or higher rate income tax. The tax-free allowance is going up from £11,850 to £12,500, and the higher rate threshold has moved from £46,350 to £50,000.
So, basic rate taxpayers will see an extra £130 in their pocket, and for higher rate taxpayers it’s £860.
If you have any questions about how these changes, or any of the others included in the 2018 budget, will affect you and your finances then get in touch with one of our financial planning experts.