{"id":155,"date":"2021-03-09T13:38:31","date_gmt":"2021-03-09T13:38:31","guid":{"rendered":"https:\/\/www.independentfinancial-advisor.co.uk\/financial-advice-blog\/?p=155"},"modified":"2021-03-09T13:38:31","modified_gmt":"2021-03-09T13:38:31","slug":"budget-2021","status":"publish","type":"post","link":"https:\/\/www.independentfinancial-advisor.co.uk\/financial-advice-blog\/budget-2021\/","title":{"rendered":"Budget 2021"},"content":{"rendered":"

Budget 2021 – what you need to know<\/strong><\/p>\n

In a Budget dominated by measures aimed at helping businesses and the economy recover from the impact of the coronavirus pandemic, there were also some significant announcements when it comes to your pensions, savings and the tax you pay.<\/p>\n

Chancellor Rishi Sunak\u2019s second Budget, delivered on 3 March, focused on ways to support businesses and jobs through the coronavirus pandemic, and looked towards the country\u2019s long-term economic recovery.<\/p>\n

Measures announced to address the ongoing impact of the pandemic included an extension of the job retention, or \u2018furlough\u2019, scheme until September, more support for self-employed people and an extension to the uplift in Universal Credit.<\/p>\n

But there were also some significant tax announcements which could affect the way you earn, save and invest.<\/p>\n

Tax-free Personal Allowance to rise but then freeze<\/strong><\/p>\n

While the Chancellor said there will be no change to the rates of income tax, national insurance or VAT he did announce changes to the tax-free Personal Allowance \u2013 how much people need to earn before paying income tax \u2013 as well as to tax bands.<\/p>\n

From the new 2021-22 tax year starting on 6 April, the standard UK Personal Allowance will increase from \u00a312,500 to \u00a312,570. And the Chancellor announced today that it will be frozen at this level until 2026.<\/p>\n

From 6 April, the basic rate income tax band will increase to \u00a337,700. This means that most people will start to pay higher rate tax when they have income of \u00a350,270 or more. This higher rate income tax threshold will be frozen at \u00a350,270 until 2026 too.<\/p>\n

If you live in Scotland, the bands and rates of tax you\u2019ll pay will be different..<\/p>\n

How does the Budget affect my pension savings?<\/strong><\/p>\n

The Chancellor announced today that the Lifetime Allowance will remain at its current level of \u00a31,073,100 until April 2026.\u00a0This is the total amount of pension benefits that you can build up during your lifetime across all pensions schemes before an additional tax charge applies.<\/p>\n

State Pension to increase as planned<\/strong><\/p>\n

The new tax year will also bring a rise of 2.5% to the State Pension. This means payments for someone eligible for a full State Pension will increase by \u00a34.40 from \u00a3175.20 a week to \u00a3179.60 a week \u2013 an annual increase of \u00a3228.80. Those who get the older basic State Pension will see it increase from \u00a3134.25 a week to \u00a3137.60.<\/p>\n

Remember that the current State Pension age is 66, and that\u2019s due to rise in the future.<\/p>\n

More tax changes to be aware of<\/strong><\/p>\n

There were also announcements today covering corporation tax, inheritance tax and capital gains tax.<\/p>\n