Autumn budget is one to watch says Fylde money expert

Chancellor Philip Hammond departs 11 Downing Street, London, as he heads to the Palace of Westminster to deliver the Budget statement. PRESS ASSOCIATION Photo. Picture date: Wednesday March 8, 2017. Mr Hammond is expected to deliver an upbeat assessment of Britain's economic prospects after Brexit in his first Budget as Chancellor, despite admitting that more austerity is in the pipeline as he battles to get the deficit down. See PA story BUDGET Main. Photo credit should read: Lauren Hurley/PA Wire

“In future, there will just be one Budget a year, in the Autumn, and so this event didn’t contain much on the big issues such as austerity and economic growth. Instead, there was confirmation of a few previously announced changes as well as one or two surprises.

“The Chancellor confirmed that the amount each individual can earn tax free will rise to £11,500 from this April with further increases over the rest of this parliament so that by 2019/20 no one earning less than £100,000 will pay income tax on the first £12,500 they earn.

“Mr Hammond also confirmed that the new Lifetime ISA will launch next month. This will allow all individuals between the ages of 18 and 40 to save £4,000 a year, with the Government adding a 25 per cent bonus to each subscription made.

“This means a £4,000 subscription will be boosted to £5,000 and can either be withdrawn to fund a first property purchase or retained until the age of 60 and then used in retirement.

“In terms of surprises, the Chancellor lowered the amount of tax free dividend income from £5,000 to £2,000 meaning potentially more income tax for investors holding their investments outside of ISAs.

“This was a particular surprise given the £5,000 tax free allowance was only set last year, but will be mitigated in part by the ISA allowance rising to £20,000 in April 2017.

“The other big surprise was a controversial one as the Government announced it would increase National Insurance contributions for the self-employed, backtracking on a manifesto promise from 2015 not to increase either Income Tax or National Insurance in this parliament.

“The controversy proved to be too great for the Government in the face of a public and media backlash, and the Chancellor has now confirmed that rates will not rise in this Parliament.

“Ultimately the really big decisions on Government spending and the economy will come in the Autumn, once it has triggered Article 50 and begun exit negotiations with the European Union.”