Here are the main summary points of Chancellor George Osborne’s recent Autumn Statement 2013 relating to financial planning: –
Pensions
The current state pension was due to rise from 65 to 68 in 2046, but George Osborne said the date will now be brought forward to the mid-2030s. He also said the state pension age could rise again at some point in the 2040s to 69. This means people in their 20s today could have to work into their 70s before being eligible for state pension benefits.
One of the biggest single items of government spending is the basic state pension. Bringing forward the rise in the age when people receive their state pension would save the Treasury about £500 billion over the next 50 years.
The state pension will rise by £2.95 a week from next April.
No changes were made to the minimum age you can access a private pension ie. 55
The Chancellor announced plans to offer current pensioners an opportunity to make voluntary NI contributions to boost their income in retirement and to extend this opportunity to those who reach pension age before the introduction of the single tier pension. Currently you can make extra contributions to the value of your state pension (through NI) before you retire but not when already receiving your state pension.
This will help those who haven’t built up much entitlement to the additional state pension especially women and the self-employed.
Individual Savings Accounts (ISAs)
The annual subscription limit will increase to £11,880 (£5,940 for cash ISAs) for 2014/2015 and the Junior ISA subscription limit rises to £3,840.
Capital Gains Tax (CGT)
The CGT exemption will increase from £10,900 to £11,000 in April 2014 and to £11,100 in April 2015.
The CGT private residence relief final period exemption for those with multiple homes will reduce from 36 months to 18 months from April 2014.
Personal Allowance
The personal allowance rises from £9,440 to £10,000 in April 2014.
Married couples and civil partners will be able to transfer £1,000 of their income tax personal allowance to their spouse from April 2015 – worth up to £200 in 2015/2016 – provided neither spouse is a higher or additional tax payer.