Budget 2014 key points and how they will affect you

Budget 2014 key points

Taxation

• Personal income tax allowance raised to £10,500 from 2015/16 tax year
• Higher rate tax threshold raised to £41,865
• 15% stamp duty on residential property purchased through a company

Fuel, Alcohol & Tobacco

• Beer duty cut by 1p per pint
• Fuel duty rise planned for September cancelled
• Tobacco duty to rise by 2% above inflation

Housing

• Help to Buy extended to 2020
• Support for building  200,00 new houses
• £200m made available for repairing potholes

Pensions (effective from 27th March 2014)

• The amount of pension that can be taken from pension as a lump sum (under trivial commutation) will increase from £18,000 to £30,000
• The maximum income that can be taken from capped drawdown each year will increase from 120% to 150% of an equivalent annuity
• The level of qualifying income for flexible drawdown will drop from £20,000 per year to £12,000 (and this limit will be removed from 2015 once legislation is passed).
• From April 2015 savers will be able to access pension savings as they wish subject to their marginal rate of income tax, rather than the current 55% charge for full withdrawal (again legislation pending).
• The age which people can first access their pensions will increase from the current 55 to 57 by 2028
• The size of the small pension pot that can be cashed in regardless of your overall pension savings will increase from £2,000 to £10,000
• And you can take up to three such small pension pots - currently the limit is two

Savings

• 10p tax rate on savings to be abolished
• From 1st July 2014 a new ISA called the NISA will be launched
• It will have a limit of £15,000 and the whole allowance can be invested in cash or stocks and shares or both
• ISA's taken out between 6th April and 1st July 2014 will automatically become NISAs on 1st July 2014 and the investment limits will increase to the new £15,000
• Junior ISA and Child Trust Fund annual contribution limit will be raised to £4,000 from 1st July 2014

More detailed information on all of the above can be found here