Published on: 29 Nov 2016
The Chancellor, Philip Hammond, presented his Autumn Statement last week. While the economy is forecast to be the fastest growing major economy in 2016, it is expected that growth will slow and inflation will rise over the next two years. This means the money in your pocket will need to stretch further. You can take control of your money by starting with our Budget planner.
From April 2017
Personal Allowance increase. This is the amount of income you can earn before you start paying Income Tax. You currently don’t pay tax on the first £11,000 of your income. From 1 April you will be able to earn £11,500 before tax.
The point at which you pay the higher rate of Income Tax will go up from £43,000 to £45,000. Do you Understand your pay statement?
Universal Credit taper reduced. If you receive Universal Credit, currently for every £1 earned after tax above an income threshold your benefit award is reduced by 65p so you keep 35p. From April you will keep 37p for every £1.
Salary sacrifice schemes tax changes. This is where you exchange some of your salary for a non-cash benefit in kind (for example a health screening, gym membership or mobile phone) and the benefit is taxed at less than salary or not taxed at all. From April they will be taxed the same as cash income (see above). Pensions, pension advice, childcare, Cycle to Work and ultra-low emission cars will be exempt.
Three-year Investment Bond paying 2.2%. With ultra-low savings rates, this new bond from NS&I will offer you the flexibility to save from £100 up to £3,000 at an expected interest rate of 2.2%. Anyone from age 16 can apply and you have to leave the money in there fore three years. Use our GoalSaver and get ready to start saving.
From June 2017
Insurance Premium Tax increase. IPT is a tax on insurers which is currently 10%. From 1 June this will go up to 12%. It is up to insurers whether and how they pass on these costs to customers. So bear in mind if you are renewing from that date. See our Insurance section for how to choose the right policy and keep costs down.
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Budgeting to make the most of your money
Autumn Statement 2016 – BBC
Autumn Statement 2016 – Gov.uk