The first of two Budgets for 2017 took place 8th March, 2017 which saw the Chancellor Exchequer, Phillip Hammond, announce his first full Budget speech to the House of Commons.
We sat down with our Wealth Management Partner, Paul Lindfield, to see what his thoughts on the Budget 2017 were and how these announcements would affect wealth management.
EXPERT VIEW – PAUL LINDFIELD
There was a little in the Budget that affected financial planning and wealth management.
We already knew that the ISA allowance is set to increase to £20,000 per person from the 6th April 2017. There had been industry noise against the proposed reduction in the Money Purchase Annual Allowance for Pensions (which applies to some people drawing pension benefits) from £10,000 to £4,000 but the Treasury have stuck to their proposals.
The announcement of the new National Savings Bond was slightly disappointing. With a three year term, maximum deposit of £3,000 and an interest rate of 2.2% it offers little that isn’t already available on the high street. The only significant rule change is the introduction of an additional tax on pension transfers to overseas pension schemes known as QROPS. A new tax charge of 25% has been introduced with immediate effect.
Whilst this is a significant change to QROPS transfers, by its very nature, this only affects a very small number of people.