LONDON: Chancellor of the Exchequer George Osborne pledged to champion “the makers, the doers and the savers” of Britain as he outlined the most far-reaching pension reforms since 1921 in a budget aimed firmly at the Tory heartlands.
The chancellor presented his “budget for savers” with a package of help for pensioners as he revealed that the economy is growing faster than expected.
In his penultimate budget before the general election, Osborne announced that he would ease the burden on millions of people facing retirement by removing tax restrictions on pension pots.
For savers, who have been hit by Britain’s record interest rates, there will big changes to the tax-free Isa pension scheme. The tax-free annual limit will be raised from £5,500 to £15,000 and savers will be able to move funds between cash and stocks and shares Isas.
Osborne announced that he would also help “hardworking families”, with support for energy costs for households as well as businesses, and confirmed that the fuel duty rise planned for September would not take place. He vowed to help businesses with changes to export finance, incentives to business investment, help with energy costs, a further clampdown on tax avoidance and a shakeup of air passenger duty.
“The message from this budget is: you have earned it, you have saved it and the government is on your side,” Osborne told a packed House of Commons.
On pensions and savings, the chancellor announced that he would:
• Ease the burden on the 13 million people with defined contribution pension schemes by removing the cap on the amount they can take out of their pension pot. Anyone who takes more than a quarter of their pension tax free will no longer face the current “punitive” 55 percent tax rate. They will instead be taxed at the normal marginal rates.
• Ensure that pensioners are not forced to buy a pension annuity.
• Encourage saving by pensioners by creating £10bn of pensioner bonds, with a maximum £10,000 of savings per bond for those aged over 65. These will offer a savings rate of around 4 percent over a three-year period. This will create around one million pensioner bonds.
• Scrap the 10p starting rate for income from pensions, ensuring that low-income savers face no tax on their savings.
• Encourage tax-free savings through an overhaul of Isa accounts. The £5,500 tax-free savings limit will be raised to £15,000 and cash and stocks Isas will be merged, allowing savers to move funds between their tax-free accounts.
Osborne said: “With the help of the British people we’re turning our country around. We’re building a resilient economy. This is a budget for the makers, the doers and the savers.” The announcements by Osborne came in the final minutes of his budget in which he announced that the Office for Budget Responsibility had, as expected, revised its growth forecast for 2014 from 2.4 percent in last year’s autumn statement to 2.7 percent.
“That’s the biggest upward revision to growth between budgets for at least 30 years,” Osborne said to cheers. Growth in 2015, Osborne said, was expected to be 2.3 percent, up slightly from December’s forecast for 2.2 percent.
The improved public finances allowed the chancellor to make another well-trailed announcement – raising the tax-free personal allowance from £10,000 this April to £10,500 to April next year.
Britain goes to the polls in May 2015 and the annual budget plan is one of the government’s last opportunities to make a difference to how people feel about their finances before then.
The Labour opposition dubbed the budget as one that failed to help ordinary people. Labour leader Ed Miliband said: “Today the chancellor (Osborne) simply reminded people of the gap between his rhetoric and the reality of peoples’ lives — living standards falling for 44 out of 45 months under this prime minister, unmatched since records began. No amount of smoke and mirrors can hide it.”
The Guardian/Reuters
LONDON: Britain annou-nced yesterday it was ditching the £1 coin it has used for the past three decades and replacing it with a 12-sided piece that will be harder to fake.
The Treasury says the new coin, made of two metals in two different colours and modelled on the old Threepenny bit, will be “the most secure coin in circulation in the world”. The new £1 will be made using cutting-edge technology that allows it to be easily authenticated. Combined with the use of two metals and the 12 sides, the Royal Mint hopes it will be hard to counterfeit.
Finance Minister George Osborne said: “After 30 years of loyal service, the time is right to retire the current £1 coin and replace it with the most secure coin in the world. With advances in technology making high value coins like the £1 every more vulnerable to counterfeiters, it’s vital that we keep several paces ahead of the criminals to maintain the integrity of our currency.”
The new coin is expected to be in circulation by 2017, following a consultation with businesses. As with all British coins, the ‘heads’ side will feature the image of Queen Elizabeth II and there will be a public competition to decide the ‘tails’ side.
AFP
