The 2021 Budget
Rishi Sunak recently delivered his budget statement to parliament, stating that the UK economy’s recovery from coronavirus is set to “swifter and more sustained” than previously thought. Below we pull out some points which may impact your future financial decisions.
It was announced that the government will cover 95 per cent loan to value mortgages through a guarantee for lenders. This scheme gives buyers, the option to put down a 5 per cent deposit on a property with a value of up to £600,000, attempting to restart the higher-LTV mortgages product offerings, which had almost disappeared from the market.
The Chancellor also extended the Stamp Duty holiday on homes worth up to £500,000. He confirmed this would be extended until the end of June, after which it will be scaled back at a staggered rate with the nil rate band set at £250,000, until the end of September.
There will be changes to the taxation system including plans to raise Corporation Tax from 19 to 23 per cent. There was also a freeze on several tax allowances including Income Tax and ISA allowances. The personal allowance (the amount you earn before you start paying income tax) will rise to £12,570 from April 2021 and will remain at this level until April 2026 and the amount people will have to earn before they pay tax at 40% will also rise to £50,270 from April 2021 and will remain at this level until April 2026. ISA annual subscription limits for 2021/22 will remain unchanged at £20,000 for Adults and £9,000 for Junior ISAs.
Savers will be able to purchase “green savings bonds” offered through the NS&I. The bonds will enable savers to buy into the Government’s £12billion 10 point “green industrial revolution”, which will include expanding offshore wind power plants, planting 30,000 trees and revamping UK homes and public transport.
Benefits Pension allowances
The pension lifetime allowance, annual allowance and money purchase annual allowance will all remain unchanged during 2021/22.
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