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from The Great Debate UK:

Budget boost for savers

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fay

--Fay Goddard is chief executive of the Personal Finance Society. The opinions expressed are her own.--

As predicted, Budget 2009 was heavy on figures and forecasts and hard on the highest earners. Unsurprisingly it is the latter that the press has picked up on. We all knew that there would be a new top rate of income tax – though some were taken by surprise at the rate of 50 percent and the speed at which it will be introduced.

This wasn’t the only hit taken by those on big salaries with restrictions on pension tax relief for those on over £150K and personal allowances for those earning over £100K. These changes will be of concern and mean that financial advisers will need to review the position of their affected clients. However, advisers will have breathed a sign of relief as the rumoured removal of all higher rate tax relief on pensions did not materialise.

There was better news though for savers. The rise in ISA limits is a welcome move and will be available immediately for those over 50, with everyone else having to wait until next year. Whilst I assume this is aimed at providing some immediate assistance to those who rely on their savings to generate income, with interest rates so low, the increase will not deliver much benefit. At least some pensioners will also receive additional tax credits though.

Is the housing package enough?

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housing.jpgThe government proposes to stimulate the housing market by scrapping stamp duty for a year on purchases of homes worth less than 175,000 pounds.

At the moment, the no-tax threshold is 125,000 pounds.

The government also plans to offer cheap loans of up to 30 percent of the purchase price of a house for first-time buyers. Households earning less than 60,000 pounds a year will not have to pay interest for five years on the loans, providing they buy newly built properties.

Dear Chancellor… What would be in your letter to Darling?

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darling.jpgLabour might appear to have calmed the storm over the scrapping of the 10 percent income tax rate for now. But new research shows the extent to which Britons are peeved about the level of income tax.

When asked what would be their key requests of Chancellor Alistair Darling, the largest proportion of more than 3,000 people polled for Unbiased.co.uk — 31 percent — said they’d like to see a cut in income tax. And, it seems, many Britons feel an obligation to help the less well-heeled: while 12 percent would like to see it reduced for everyone, 19 percent want a cut for less affluent sections of society.

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