Hi everyone,
I hope you’re one of the lucky ones to have dodged the snow so far, (friends of mine down South have been snowed in big time!) because I’d like to think this article this will give you a little warm feeling a week before Christmas… or at least warn you about some of the treacherous financial black ice that is very definitely underfoot just now.
First things first, watch out for an increase that’ll quietly catch pretty much all of us with the return of 17.5% VAT rate (yep it’s been a year already since it was dropped to 15%).
To sidestep it is impossible but you can be proactive and still stay standing like this – firstly budget an extra 2p or 3p in each pound you spend to cover the rise. Secondly and quite urgent if you do want to truly ‘beat it’ – if you have a large purchase you wish make, try all you can to order and pay for it before the start of the New Year. Getting to those early “January” Sales running directly after Christmas could be a wise and urgent priority for you depending on what you’ve got your eye on.
Now a little bit of pre-Christmas cheer (or how to get another 2.5% back again)…
The basic state pension goes up by 2.5% in April 2010. This means up £2.40 to £97.40 weekly for a single basic rate pension and up £3.85 to £156.15 a week for a couples’ basic rate pension.
Oops! Now we’re onto the ice again…
National Insurance contributions rise by 1% in April 2011 – for those earning over £20,000 whether employed, employer, or self employed. Next onto aspiring homeowners…
Freedom from having to pay Stamp Duty for those who purchase a property for less than £175,000 will end and the threshold will return to £125,000 after the new year Budget.
Ah, but at least shady bankers will get their come uppance will they not – do I hear you ask? Well, not quite, but Alistair Darling just announced in his Pre Budget Report that there will be a one off tax of 50% applied to all discretionary bank bonuses over £25,000; income tax is applied as normal… the Bankers themselves just squeezed out of that one.
However, if you like a laugh with friends at the bingo – you get 2% back yourself; Bingo duty is down 22% to 20%.
Meanwhile the Chancellor continued with some cold blasts of his own – the Inheritance Tax Threshold will be frozen at £325,000 until at least 2011.
Next here’s a slippery slope for those who earn “too much” – anyone earning £150,000 a year or more including employer pension contributions will find their Pension tax relief slashed from 40% to 20%, but it won’t affect those earning less than £130,000 per annum.
And… because we all love the Internet sooo much – we’ll all be throwing 50p a month into the tin to fund super fast broadband if we have a landline.
On the other hand if you’re worried about keeping a roof over your head in 2010 then hope may be at hand for a little longer – those who are facing repossession can take advantage of The Mortgage Interest Scheme for another six months, which is how long it’s been extended by. Hopefully, by summer it may be a little warmer then.
Keeping warm also gets a boost with an extra £150 million going into the Warm Front scheme for those families on low incomes to make their homes properly habitable with new heating and insulation. Low income families can also look forward to a new boiler when the Government introduce their “Boiler Scrappage Scheme” in April 2010 which gives the neediest £400.00 towards a new, fuel efficient boiler.
At the same time an extra 500,000 children from low income families will get free school meals and the child component of Children’s Tax Credit also goes up by £65.00. Additionally inflation-linked benefits go up by 1.5% in 2010. This includes Child Benefit, Guardian’s Allowance, Working Tax Credit (except things relating to childcare), Working Tax Credit will not be taken into account when calculating Housing Benefit and the disability elements of Child Tax Credit.
There we have it then – a quick trip out on the ice and back, hopefully you’ll enjoy the skating and remember it’s one way to beat the winter blues. For the eagle eyed among you, today’s picked out some of the key things of note arising out of Alistair Darling’s Pre Budget Report 2009 last week… which reminds me, there’s one last thing for you; consider it an early Christmas present from Mr Darling himself…
The ISA Allowance will go up to £10,200 for all savers (with a £5,100 Cash ISA maximum) from 6th April 2010
but if you are over the age of 50 then you can take advantage of this increased limit right now.
As ever, if you need to talk about anything just give me a call on 0800 321 3508
