Spring is looking to be a very busy season for the financial industry. With the new tax year, new pension changes and tax increase, there is a lot to keep up with. We have put together a summary of key dates, which we think could help you to keep up to date with the most important changes coming up in the next few months.
Key financial events:
- ISA deadline is coming up
The last day of the tax year, April 5th, is the ISA deadline. Any tax-efficient savings allowance that are not utilised before the 5th April deadline will effectively be lost, as all ISA and Junior ISA allowances are reset at the beginning of each tax-year.
- Pension changes
The new pension reforms will be upon us this spring. As you have undoubtedly noticed, the pensions market will change considerably over the coming months.
From April 2015 savers will be able to access the entirety of their pension at any time after the age of 55 years, subject to income tax at marginal rates on three-quarters of the money. Savers who use “income drawdown” will be allowed to take larger sums as income.
The Government will also be launching their “Pensions Guidance” scheme in partnership with Citizens Advice. This is where anyone over the age of 55 years can go to seek guidance on what the best option would be in regards to their pension in their circumstances. It will be offered free of charge.
- Child Trust Funds will become Junior ISAs
From April 2015 it is hoped that parents will be able to transfer their child’s Child Trust Fund (CTF) into a Junior ISA, (link) which may provide better value for money for some families. This is pending a final decision from the Government.
The change could benefit up to 6.1 million children, who currently have savings in a CTF. They may be able to get better returns on their investment, pay lower charges and have more choice of products by moving to a Junior ISA.
- The ISA allowance is going to increase
The ISA allowance will increase from £15,000 to £15,240 and the Junior ISA allowance will increase from £4,000 to £4,080 from 6th April.
This means savers will be able to deposit up to £15,240 tax efficiently into their ISAs throughout 2015/2016, and £4,080 in a Junior ISA. This is a modest rise compared to the increase from £11,880 to £15,000 in July, but is directly linked to the Consumer Price Index inflation figure.
- The Tax allowance will increase
The personal allowance for the next tax year – the amount that anyone can earn without being liable for income tax – is scheduled to go up from £10,000 to £10,600 from 6th April 2015. The higher-rate threshold will also increase to £42,385 from £41,865.
So, the financial industry has a very busy season ahead of it. Don’t forget, if you have any questions about any of the changes mentioned today and how the might effect you or any of our plans, get in touch and we will be able to help you out.
Date published: 17/07/15
