Households up and down the country are hoping Chancellor of the Exchequer George Osborne will come up with a couple of ‘surprise’ announcements in Wednesday’s Autumn Statement to make their financial life a little easier.
Money experts believe there will be nothing to quite match the shock overhaul of the pensions market revealed in Osborne’s Budget in March – reform that will enable most people aged 55 and over to access their pensions from next April as they see fit rather than be compelled into an uncompetitive or inappropriate annuity.
But with one eye on next May’s General Election, they say he might firm up on broad pledges already made by the Prime Minister to increase tax-free personal allowances, the level of income after which taxpayers begin to pay the 40 per cent higher rate of tax – and the inheritance tax threshold.
Surprises up his sleeve? Households up and down the country are hoping Chancellor of the Exchequer George Osborne will come up with a couple of ‘surprise’ announcements in Wednesday’s Autumn Statement
At the Conservative Party conference early last month, David Cameron said he would raise the tax-free allowance from £10,500 to £12,500 by 2020. He also confirmed that the threshold for the 40p income tax rate would be raised from £41,900 to £50,000 by the end of a five-year Conservative government.
Separately, he said only the ‘very wealthy’ should pay inheritance tax. Currently, the tax is charged at 40 per cent on the value of estates over a threshold of £325,000 – or £650,000 for married couples and civil partners.
The threshold has been frozen since 2009 resulting in many households, especially in London and the South East being potentially exposed to the tax. An exclusive survey of more than 10,000 investors conducted by financial company Interactive Investor shows that moves on these three fronts would all prove popular, with bigger personal allowances being welcomed the most.
Some 29 per cent of those polled said higher tax-free allowances were the policy initiative they wanted more than any other.
What we want to hear: Nearly 30 per cent of people want to see an increase in personal tax allowances
Rebecca O’Keeffe, head of investment at Interactive Investor, says: ‘It’s not surprising that more people want to keep more of their income, either through an increase in personal allowances or by a hike in the threshold for 40 per cent tax.’ One other tax that Osborne might act on is stamp duty on house purchases. Some 22 per cent of those taking part in Interactive Investor’s survey voted for a rise in the value of house purchases exempt from stamp duty – from the current £125,000 to £300,000.
It is expected that the Chancellor will use the Autumn Statement to announce improvements to the Current Account Switching Service launched last year to make it easier for people to switch banks.
Despite the new service, switching levels remain low so Osborne might require banks to complete switches within five working days, rather than the current seven days.
Read more: http://www.thisismoney.co.uk/money/news/article-2854124/What-cards-left-sleeve-George-Households-hoping-surprise-announcements-Wednesday-s-Autumn-Statement.html#ixzz3KaEypMcD
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