Yahoo Finance UK columnist and head of personal finance at Hargreaves Lansdown, Sarah Coles, tells us five likely changes which could have a big impact on your finances.
Income tax cuts
There are no guarantees, but we could get an income tax or National Insurance tax cut. This could come in the form of thresholds being unfrozen ahead of schedule, which would be a major relief. These thresholds matter because they’re the point at which you start paying tax – or pay a higher rate. Freezing them means pay rises have pushed people into paying much more tax. At the moment, the plan is to leave them in the deep freeze until 2028, during which time they’ll do even more damage to our finances, so an early defrosting would be very welcome.
Inheritance tax cuts
This is looking less of a shoo-in than it did before income tax cuts were laid on the table, but remains a possibility. The Treasury likes the idea because it’s an unpopular tax and it can be cut without massive expense or inflationary risk.
ISA reform
This was floated a couple of months ago, and although pre-statement chatter has been a bit quiet on the subject, we’re still expecting some announcements. There’s the outside chance of a rise in the overall £20,000 allowance, which would be a shot in the arm for investors, and could provide a popular rabbit to pull from the hat.
Pension changes
All eyes will be on Hunt’s plans for the state pension, and whether he decides to increase it with the triple lock of 8.5%, or find a way to peg it to a lower increase. It’s also worth watching for news on what’s known as the lifetime pension.
News on NS&I
We’re expecting Hunt to announce how much money it wants NS&I to raise in the coming tax year. This matters, because there’s a reasonable chance it will be much higher than the year earlier, which means NS&I will have to work harder to attract more savings.