Autumn Budget 2021
How today’s announcements might affect your financial planning
In Chancellor Rishi Sunak’s Autumn Budget 2021, he stated that this will begin the work to prepare for a new economy post COVID-19. Although there was little in the way of news from a financial planning perspective, here’s a breakdown of some of the key points that we have already been told, in addition to a few fresh announcements made.
Following the announcement back in September 2021 of the 1.25% increase in National Insurance for employers, employees and the self-employed and a tax increase on dividends of the same amount from April 2022, individuals will have been pleased to see no further significant personal tax changes in this latest Budget. Encouragingly, Rishi Sunak, also stated he wants to reduce taxes and that “by the end of this parliament, I want taxes to be going down not up.”
From a personal financial planning point of view, there were few other changes mentioned, with the only really relevant announcements being plans to review the 0.75% per year cap on charges for workplace pensions used for auto-enrolment and plans to reverse a tax anomaly that prevents those saving into their pensions via net pay arrangements from receiving a tax bonus if their earnings are less than the personal allowance threshold from 2024-25.
To coincide with the UK hosting COP 26 in November the Treasury backed Green Savings Bonds offered by NS&I and announced in the Spring Budget are now on sale for at least the next three months offering savers a fixed rate of return of 0.65% per annum over the three-year investment term, for deposits between £100 to £100,000.
Other than the above, Sunak highlighted that the Office for Budget Responsibility (OBR) expects the Consumer Prices Index (CPI) inflation to average 4% over the next year and this will be a reminder to individuals holding significant levels of cash that its purchasing power is being eroded by inflation and it could be worth investigating whether some of this could be made to work harder for them.
As always, the devil will be in the detail, so watch this space for our full Budget report where we’ll report on all aspects of this Autumn Budget, including those that were highlighted in the Chancellor’s speech and those that weren’t.
If you’re concerned about how the announcements may affect your finances, why not get in touch and see if one of our financial advisers can help. We’re offering those with £100,000 or more in savings, investments and pensions a free financial review worth £500.