Continued support during the pandemic was, unsurprisingly, the main focus of Rishi Sunak’s Budget Statement on 3 March, in what continues to be an exceptionally challenging time for all global economies.

The Chancellor proclaimed that he would “continue doing whatever it takes” by outlining a three-point plan offering support for jobs and businesses, fixing finances, and charting economic rebound, which he anticipated will be “swifter and more sustained” than previous expectations.

He revealed the UK medium-term economic outlook from the Office for Budget Responsibility (OBR). Over the remainder of 2021, a strong economic rebound for the UK is forecast, as restrictions ease and allow economic activities to resume. The OBR forecasts that growth will moderate towards the end of 2021 and output will return to its pre-pandemic level in mid-2022, six months earlier than previous predictions, reflective of the faster rollout of the vaccination programme.

The Chancellor was left with little room for manoeuvre when it came to taxation, as the Conservative manifesto pledged not to alter Income Tax, National Insurance or AT, so some key tax thresholds will now be frozen. For example, the Personal Allowance has risen with inflation for 2021-22 as planned, to £12,570, before 20% Income Tax becomes payable, and the higher rate threshold, at which people start to pay tax at 40%, has risen to £50,270, but then both thresholds will be frozen at these levels until April 2026. Similarly, tax thresholds for the pension Lifetime Allowance, Inheritance Tax and the annual exemption for Capital Gains Tax will be frozen until 2026.

In other Budget news – the Treasury has announced plans to launch a ‘green savings bond’ later this year through National Savings & Investments (NS&I). The investment will allow UK savers to invest in green projects. Funds raised will be earmarked for projects such as renewable energy and clean transport. Full details of the bond are yet to be revealed.

It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.

Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.

Tax and Estate planning are not regulated by the Financial Conduct Authority

The value of pensions and investments can fall as well as rise. You may get back less than you invested.

CA Financial Services Ltd are an Independent Financial Adviser based in Sevenoaks, Kent. From our Sevenoaks offices, we offer IFA services throughout Tonbridge, Tunbridge Wells, Dartford, Orpington and across into Sussex and Surrey. Please call us on 01732 617 950 to book a free initial appointment.

CA Financial Services offer financial advice, pensions, investments, ISAs, Equity Release and Inheritance Tax Planning for the whole family. We have 14 years’ experience as Financial Advisers based from Sevenoaks and are truly independent, allowing us to give our customers the best financial advice possible.

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