A few budget summary points

Spring budget 2017 personal finance areas

Self-employed

Mr Hammond increased the main rate of class four National Insurance contributions by 1 per cent to make the tax system more equal for the employed and self-employed.

This will take effect from April 2018 and will be followed by a further 1 per cent increase in April 2019.

This could further hinder the self-employed ability to raise a mortgage.

Update: 15/03/17 The increase in the NIC Class 4 rate has been stopped due to a manifesto promise. Given that the rise was stopped a week after they were announced shows a need for a clear policy on the self-employed.

Property

The Budget skipped any policies to help homebuyers. It failed to even comment on or reform the upcoming reduction in mortgage tax relief for landlords and the buy-to-let market.

Investment

A three-year NS&I Investment Bond with a market-leading interest rate of 2.2 per cent is set to be launched. The bond will be available for 12 months from April 2017. This will hardly keep your money in-line with current inflation forecasts, so treading water…

The government confirmed the Lifetime Isa will be available from 6 April this year. This will allow younger adults to save up to £4,000 each year and receive a bonus of up to £1,000 a year on these contributions. Funds can be withdrawn tax-free towards a first home or saved until a person turns 60.

The tax-free dividend allowance will be reduced from £5,000 to £2,000 from April 2018. This will reduce the tax difference between the self-employed and those working through a company. Typically, general investors will need over £50,000 worth of stocks and shares outside an ISA to be affected. This decision to slash the dividend allowance from £5,000 to £2,000 will possibly push more people into tax efficient wrappers such as Isas and pensions.

Pension

The confirmation of the Pension Money Purchase Annual Allowance at £4,000 is rather unfortunate and only compounds the complications for the over 55s.

A 25 per cent charge on qualified recognised overseas schemes (Qrops) for those looking to move their pension overseas is set to be introduced.

Economic

It seems that what really matters at the mo is for the UK economy and markets short-term will be; the beginnings of Brexit negotiations coming up, UK consumers and higher inflation and the volatility and consequences of additional fall in the pound, if any.

If you want to speak to an Adviser, Enquire here