How could the March 2015 Budget affect your family?
Now we’ve heard the details, this is a great time to think about your family’s finances and what the Chancellor’s Budget statement in March 2015 could mean for you in the years to come. Here you’ll find links to some of our most popular articles, tools and calculators that should help you find personalised answers to questions about how the Budget may affect your family’s finances.
If you’re starting out as a young family, anything that helps you save or get even more value from your money is good news. There’s some good news to start with: from April 2015, everyone can earn £10,600 a year before income tax kicks in. Then from April 2016, this will be raised to £10,800 and £11,000 the year after – so it looks as though many families could have a little more money in their pockets.
First-time buyers – if you’re hoping to get onto the property ladder soon, then the announcement about Help to Buy ISAs will be welcome news. In short, if you’re a first time buyer in the UK saving up to £200 a month towards your first home, then the government will boost those savings by 25% in a Help to Buy ISA.
That’s a £50 bonus for every £200 you save – which could make all the difference. (You can see how everyday savings could mount up, even before you open a Help to Buy ISA. Our savings calculator helps you see how to start saving for a deposit.)
The minimum bonus will be £400, for which you’ll have to save £1,600 (you’ll also be able to put in an initial £1,000 deposit on top of the £200 pm maximum). The maximum bonus will be £3,000. But because those bonuses are paid ‘per person’, young couples could get a helping hand of up to £6,000 towards their first home. This bonus is paid if and when the property purchase is made.
Check out our first-time buyer starting out tips. You could be using them sooner than you thought…
Fuel duty freeze – this is also good news for young families. The Chancellor won’t be increasing the tax on fuel at the pumps in September, so you’ll still get ‘the same amount of petrol for the pound’. It’s a great excuse to take the family out somewhere this weekend!
And if you’re thinking about where to go on holiday, there’ll be more good news in the future. From 2018, it’ll cost less to cross the River Severn using the Severn Toll – so how about planning a countryside holiday-at-home, with a few days over the border? The charges will go down from £6.50 for cars, and £13.10 for vans – to one simple lower charge of £5.40.
Families with older children
This one’s good news for every family who’s putting money away on a regular basis. With the new personal savings allowance, the first £1,000 of interest on savings income is going to be tax-free from April 2016 if you’re a basic rate tax payer. For higher rate payers it will be the first £500 (additional rate payers won’t see this benefit).
Perhaps better still for most families who are saving hard – there’ll be more flexibility about putting money into and taking it out of a normal ISA: you’ll be able to withdraw and re-deposit or re-invest your savings in the same ISA, more than once. However, the repayment of money into your ISA will have to be made in the same tax-year.
Are you saving hard to help pay for University fees? Higher amounts of tax-free savings could make a real difference. Check out our university costs calculator to see how much you may need to save if your children would like to go on into further education.
You could also try our cut back and save calculator – because it really is the little things that add up to a tidy financial sum. Even a small amount makes a difference over a long period of time, particularly if you’re saving for something special like a special occasion – perhaps even a wedding anniversary.
And if you’re slightly older - maybe your children have left home already? - then you may be looking forward to later life and your retirement plans. Today The Chancellor announced a change to the Lifetime Allowance – that’s the amount you can take out of a pension scheme without paying extra tax – taking the amount down from £1.25million to £1million.
Many people won’t save that much during their working lives, but it is good to check your progress regularly. Our retirement planner tool is really useful, because it works out the estimated future value of your personal pension plans and how much income you may get from them.
In summary, then…
Over the last three years or so, we’ve seen lots of changes in family savings habits – perhaps this Budget will help you find a few pennies extra to put away for a rainy day?
You can see how other families have been saving money, and how they’re saving more (or less) as time goes by, in our most recent family finances report.
Remember, if you can put a few pennies away, there’s an old saying that the pounds will take care of themselves – including the newly designed £1 coin, inspired by 15-year-old David Pearce, from Walsall.
Featuring the four plants associated with the UK’s four nations (a rose, a leek, a thistle and a shamrock), The Chancellor rang David personally to let him know his design has been chosen for the new 12-sided coin. We can all look forward to seeing its introduction into circulation from 2017.