Whenever the Chancellor makes a statement, many lack the financial experience to grasp the full picture of the matters discussed. For many, Chancellor statements and budgets can be especially confusing. Do not worry; our expert financial planners are here to help you. Here’s a summary of the Autumn Statement 2022.
Tax relief will be given at the highest marginal rate for personal contributions to pensions. As such, paying personal contributions into your pensions will remain a very attractive option for pension and later life savings.
From April 2023, the threshold for individuals to pay the additional tax rate of 45% will be lowered to £125,140, affecting both non-savings and non-dividend income for taxpayers in England, Wales, and Northern Ireland and savings income and dividend income for taxpayers across the UK.
Together with the NIC thresholds, non-savings and non-dividend income in England, Wales, and NI, as well as savings income and dividend income across the UK, will be fixed at current levels until 2028, a two-year extension from the previous announcement.
As a result of the triple lock promise, the state pension will increase by 10.1%, in line with inflation. This increase means that those on the full new state pension will see their weekly payments increase from £185.15 to £203.85, whereas those on the full basic state pension will see their weekly payments rise from £141.85 to £156.20.
Continuing with the triple lock pension protection announcement, the Chancellor also announced an increase to the minimum income guarantee for Pension Credit. This increase is in line with inflation, 10.1%, which protects pensioners on the lowest income levels.
With pension legislation has been the subject of huge changes in recent years, saving for retirement remains a very complex area with varying rules and regulations. Our pension specialists can help you to make the most of your pensions and other assets and achieve your retirement goals.
Currently, the allowance for tax-free dividend income is £2000. However, this will fall to £1,000 from the 6th of April 2023 and £500 from the 6th of April 2024. Additionally, The Chancellor has confirmed no changes to the dividend tax rates, which will remain at 8.75%, 33.75% and 39.35% in the tax year 2023/24.
The nil rate bands for inheritance tax will remain fixed until the 5th of April, 2028. This includes the nil rate band (£325,000), the residence nil rate band (£175,000) and the taper threshold for the residence nil rate band (£2,000,000).
Further details were provided regarding capital gains tax exemption. From the 6th of April 2023, the tax exemption will decrease from £12,300 to £6,000, further decreasing to £3,000 from the 6th of April 2024.
The UK tax system is complex, and legislation is continuously changing, but no one likes to pay more tax than they have to. With our expertise and careful planning, we can help you to save tax by making optimum use of the various reliefs, allowances and exemptions available to you.
At Springfield Financial, our expert advisers provide tax planning financial advice and retirement planning services to individuals throughout Preston, the Ribble Valley, the Fylde Coast, the Lake District, and further afield. For further information or to arrange an initial no-obligation consultation with our retirement specialist Ailsa Thomas, please call 01772 729 742