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What the 2014 Budget means to you


From 6th April the amount you can save in ISA’s will rise, so you’ll be able to save a maximum of £11,880, up to half of which (£5,940) can be put into a cash ISA.

From July 2014 the Government will create the New ISA (NISA) with a £15,000 limit to make the system simpler. You can use the full limit for either cash, investments or a mix of both.

Any ISA’s opened between 6th April and 30th June will automatically become a NISA, with a higher limit. From 1st July you will be able to add further money up to the new £15,000 limit.

Personal pension reforms

What is changing now?

The new arrangements give savers greater access to their pensions. Savers whose total pension savings amount to £30,000 – rather than £18,000 – will be able to take the entirety as cash (“trivial commutation”). This will be taxed at marginal rates.

Savers with larger amounts in pension savings will be able to take up to three pensions worth £10,000 each as cash, rather than two worth £2,000.

Savers who use “income drawdown” will be allowed to take larger sums as income. This is likely to be several thousand pounds extra a year for each £100,000 in savings.

When can I make full withdrawal?

The temporary reforms introduced will fade away in April 2015, when savers will be able to access the entirety of their pension at any time after age 55, subject to income tax at marginal rates on three-quarters of the money.

The ability to take the whole pension as one lump of income would mean someone with a £100,000 pension could take £25,000 tax-free and then withdraw the remaining £75,000 (which would be treated as income for that tax year) to spend or invest as they saw fit.

What’s the catch?

The price for savers will be that access to their pension pots will be pushed back, at the same pace as the State Retirement Age. It will move to age 57 in 2028 with State Pension age moving to 67. This could affect those around age 40 and under.

Tax changes

Personal allowance

Personal allowance is the amount of income you can receive before you pay tax. For people born after 5th April 1948 this allowance will go up to £10,000 from April 2014 and rise to £10,500 in April 2015. Allowances for people born before 6th April 1948 stay frozen this year at £10,500 for people aged up to 74 and £10,660 for people aged 75 and over.

As previously announced, from April 2015 a person of any age whose income is too low to use all their personal allowance can transfer part of their unused allowance to their spouse or civil partner, as long as they’re not a higher or additional rate taxpayer or receiving the Married Couple’s Allowance. This means that you could make savings if one of you is not a taxpayer, and the other pays basic-rate tax. This change will only benefit married couples and registered civil partners.


George Osborne previously announced that the Government will reduce energy bills by £50 per household. He also announced a freeze in carbon taxes. This is likely to save households up to £15 a year on energy bills.

Fuel duty

If you drive, you’ll be happy that the Government has again delayed a planned increase in fuel duty. The planned September 2014 increase of 2 pence a litre will not take place.

Bingo & Alcohol Duty

Also, let’s not forget the budget also brought some cheer for the pub and bingo industry with the scrapping of the alcohol duty escalator, a 1p per pint cut in beer duty and the halving of Bingo duty!

If you wish to have a comprehensive financial review with one of our experts, then please contact us at: info@riverside-consultants.com

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and
changes which cannot be foreseen.