UK Budget 2021
We endeavour to provide our members with the most up to date information that affects their personal finances and general money matters. Here are the top headlines from the March 2021 Budget that may affect you. Visit GOV.uk for the full Budget statement.
Last summer the amount at which Stamp Duty is paid on home purchases in England and Northern Ireland was temporarily increased to £500,000. This tax break was due to end on the 31st March 2021 but in the Budget this was extended to the 30th June 2021. After this, the starting rate for Stamp Duty will be £250,000 until the end of September, at which point it will revert to £125,000.
- First-time buyers will continue to not pay Stamp Duty up to £300,000.
- There will be a Mortgage Guarantee Scheme to be launched in April for 95% loan to value residential mortgages for homebuyers with 5% deposits. This scheme will cover properties up to £600,000.
- There was no mention of the Lifetime ISA withdrawal charge remaining at 20% - we can assume that this is returning to 25% in April 2021.
- There will be no changes to rates of income tax, National Insurance, or VAT.
- Levels of Personal Income Tax allowance, which are currently at £12,500 will rise to £12,570 from April 2022 and be frozen until April 2026.
- The threshold for Higher Rate Income Tax, which is currently £50,000 will rise to £50,270 from April 2022 and also be frozen until 2026.
- There are also no changes to inheritance tax, capital gains tax allowance or lifetime pension allowance.
- Planned increases for duties on alcohol were cancelled with their current rates frozen for another year and the planned fuel duty increase was also cancelled.
Personal finance, savings & wages
- The Government has explained that they will continue to pay furlough until the end of September. 80% of wages will be covered for employees’ hours that they cannot work due to Coronavirus.
- Support for self-employed workers will also be extended until September and 600,000 more people in this area will be eligible for financial help as access to support grants is widened.
- The £20 uplift in Universal Credit has also been extended for another six months.
- Minimum wage will increase to £8.91 an hour from April.
- Contactless payments limits will rise from £45 to £100.
- The annual subscription limit for adult ISAs will remain unchanged at £20,000.
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