2015 Budget - top changes for savers
Last month, Chancellor of the Exchequer, George Osborne delivered his Budget to Parliament. Below, we summarise some of the top changes that may affect Al Rayan Bank savers between now and next April:
New Personal Savings Allowance
Available: April 2016
From April 2016, a new tax-free personal savings allowance means that you will not have to pay tax on the first £1,000 of profit that you earn from your savings, if you are a basic rate taxpayer, or £500 profit if you are a higher rate taxpayer.
Basic rate taxpayers earn a total income up to £42,700 a year. Higher rate tax payers, earning from £42,701 to £150,000, will be eligible for the £500 tax-free savings allowance. Any saver earning more than £150,000 will not qualify for the new savings allowance.
New ISA allowance
This year’s allowance is £15,240, an increase of £240 on last year. You can save this amount in either in cash, stocks and shares, or a mixture of the two. However, there are some things to remember when choosing your ISA.
New flexible cash ISA
Available: Autumn 2015
Changes to ISAs in Autumn this year (exact date yet to be announced) will mean that it will be possible to take money out of a cash ISA and put it back later in the year, without losing your ISA tax benefits. You would need to repay the funds in the same financial year (April to April) as you took them out, and make sure that your bank will allow you to withdraw the money without losing profit.
New rules for ISAs and inheritance
It is now possible for spouses to inherit ISAs tax free. This applies to anyone whose spouse has died since 3 December 2014. The surviving spouse can either transfer the funds into an ISA in their own name with the existing provider, or they can transfer the funds into a new account with a new provider.
If you would like to read the budget in full, you can find a copy of it here
New Help to Buy ISA
Available: Autumn 2015
The announcement of a Help to Buy ISA is designed to help first time buyers save for a deposit on a property up to £250,000 (or £450,000 in London).
Under the new scheme, first time buyers can save up to £200 a month, and the Government will put in an extra £50, up to a limit of £3,000. As you can open the account with £1,000, it is possible to save £1,200 in the first month, which will earn a £300 Government boost.
Please note that there is not currently a Sharia Compliant version of this scheme.