The Spring Budget 2023
A “Budget for Growth” is how Jeremy Hunt chose to describe the Spring Budget. How much do you think it will help you?
Some of the announcements…
The biggest headline was probably the changes announced to pensions with the annual pension input allowance being increased by 50% up to £60,000 per tax tear. Alongside this, in a move targeted mainly at high earning NHS staff, the Chancellor also abolished the pension lifetime allowance. Meaning that instead of the limit of a person being able to save just over £1M in their pension before facing some hefty tax charges, there is now no limit. It may not be time to crack open the Champagne just yet though, as Labour have suggested that they’ll look to reverse these measures if/when they get into power after the next General Election. A less talked about limit, the Money Purchase Annual Allowance is also increasing from £4,000 to £10,000 per year.
There were no new announcements in terms of tax rates or thresholds. The widely unpopular decision to increase Corporation Tax to 25% is still going ahead.
Energy Price Guarantee
The planned increase of the Energy Price Guarantee is being delayed until July, meaning that the based on current prices the energy cost for the “average home” will remain at the bargain price of £2,500 per year as opposed to £3,000.
Free childcare for 1 and 2 year olds will also be phased in over the next 2 years. The hope being that this will bolster the economy by allowing more parents of infants back into work if they no longer have to pay exorbitant childcare costs with up to 30 hours of free childcare being announced.
Fuel and alcohol duty
Good news for anybody driving to the off-licence as fuel duty and alcohol duty have both been frozen for the next 12 months.
The wheels of our cars were no doubt delighted to hear of a further £200M being earmarked to tackle the potholes on our roads. By my reckoning, that’s £1 to fix each pothole in my home County of Shropshire.
Did anything in the budget, particularly around pensions raise any questions for you?
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Please note: This article is provided for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.
Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.
The value of your investment can go down as well as up and you may get back less than you have invested.
The Financial Conduct Authority does not regulate Taxation advice.