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What Does the Budget Mean For You?

By March 25, 2024No Comments

Chancellor Jeremy Hunt delivered his Budget on March 6th, in which he set out his tax and spending plans.

So what did he say about pension planning and savings that you need to be aware of?

Pensions triple lock to be maintained

Mr Hunt has committed to keeping the triple lock in place, which means the state pension will go up by whichever of the following is highest:

  • Average earnings
  • The rate of inflation (as per the Consumer Price Index)
  • 2.5%

Ultimately, that means people can be confident that the state pension doesn’t lose value as economic circumstances change.

Consultation on workplace pension pot for life

Every time a person moves to a new job, they’ll be auto-enrolled onto a new workplace pension scheme.

But in last year’s Autumn Statement, the government said it wants to give savers a legal right to require a new employer to pay pension contributions into an existing scheme.

Mr Hunt has reaffirmed the government’s commitment to exploring a lifetime provider model for Defined Contribution (DC) pension schemes in the long-term. 

However, no new details on how this could work were put forward, which has led to speculation that the government could actually be reconsidering its initial plan.

A £5,000 “British ISA” tax allowance to be introduced

Designed to encourage savers to invest in Uk companies, this would give people an extra £5,000 allowance on top of their existing £20,000 ISA allowance. The government believes this will offer savers a tax-efficient way to capitalise on the growth of the “most promising” homegrown businesses.

The details of the British ISA are to be the subject of a six-month consultation, and no date for its proposed introduction has yet been confirmed.

New British Savings Bonds offering savers a guaranteed rate for 3 years

National Savings & Investments will launch a product that offers consumers a guaranteed interest rate, fixed for three years.

The Chancellor often likes to deliver a rabbit-out-of-the-hat moment in a Budget announcement, and perhaps the only surprise of this year’s statement was that this didn’t happen.

In fact, most of the key announcements were trailed in advance, which perhaps explains why the response has been fairly subdued.

But savers will welcome moves such as the commitment to maintain the triple lock, and the new investment options are an interesting proposal that many will be keeping a close eye on.

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