Author Topic: UK Budget 2016 - good day for savers, good day for fat people  (Read 5554 times)

frugledoc

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Great Tory Govrernment budget for UK savers today:
- 20,000 per year into ISAs from 2017
- Under 40s will get a 1000 tax free boost for saving 4,000 per year
- No change to pension annual allowance of 40,000
- No change to higher rate full tax relief for pension contributions
- Reduced capital gains tax for non property investments in taxable accounts (28% - 20% for higher rate payers and 18% to 10% for lower rate payers)

It's almost as if this budget was written for my family for once.

Also, fat people stand to benefit with a sugar tax on sugary drinks, which is a good start to the countries ever increasing percentage of overweight and obese kids and adults.
« Last Edit: March 16, 2016, 11:43:43 AM by frugledoc »

Rightflyer

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #1 on: March 16, 2016, 12:30:39 PM »
Yes, we watched George Osborne's budget speech with great interest. It did seem very Moustache friendly.

Good news for small business owners as well.

mohawkbrah

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #2 on: March 17, 2016, 01:19:10 AM »
Yes, we watched George Osborne's budget speech with great interest. It did seem very Moustache friendly.

Good news for small business owners as well.

pretty much every small business owner now doesn't have to pay any business rates. it's insane. will really help the struggling local economys

Richardp10

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #3 on: March 17, 2016, 01:33:39 AM »
A great budget for savers, lifetime isa a good option for some who are sceptical about pensions and a great boost to would be home buyers who want to invest in the meantime.

Not sure on the sugar tax, bit far removed from the values of economic liberalism that the party is meant to be about!

cerat0n1a

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #4 on: March 17, 2016, 04:47:48 AM »
Not sure on the sugar tax, bit far removed from the values of economic liberalism that the party is meant to be about!

Do you think so? Principle of "sin taxes" is well established - we've had them on alcohol & tobacco decades after all. VAT already applies on some drinks (sugary soft drinks) but not others (milk, tea, coffee and er... hot chocolate...) and some food (e.g. cake but not bread.) As diabetes is costing the NHS more than 10bn per year, a slight nudge doesn't seem too disproportionate. The authoritarian approach would be to regulate the amount of sugar allowed in a drink, or ban them from being sold to under-16s or similar. Of course, a previous time the British government taxed sugar started the path to the American revolution.

Agree that the budget is mostly good for savers. I can see a certain amount of confusion for younger people with the choice of saving in pensions, lifetime ISAs, help-to-buy ISAs, cash ISAs, shares ISAs etc. plus savings "top-ups" for the low paid.

NearlyThere

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #5 on: March 17, 2016, 05:35:24 AM »
Seems like a great budget for "us" for a change.

ISA increase (probably the most welcome) + increase in higher rate tax bracket + small business rate relief + no change to tax relief on higher rate contributions to pensions.

Not really sure about this Lifetime ISA tbh though. I can only see the intrinsic benefit over a pension being the 5% charge to take funds early (before 60). As with pensions though I can see this being increased as the government deems fit.

All in all, a hooray from me. For a change...

Rightflyer

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #6 on: March 17, 2016, 06:24:23 AM »


Agree that the budget is mostly good for savers. I can see a certain amount of confusion for younger people with the choice of saving in pensions, lifetime ISAs, help-to-buy ISAs, cash ISAs, shares ISAs etc. plus savings "top-ups" for the low paid.

Sounds like a business opportunity ceratonia. You could provide "guidance" on the options to young people...

Exenos

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #7 on: March 17, 2016, 06:49:33 AM »
All I've heard so far is - "I can't save anything so can't benefit".

Lifetime ISA only seems good for the first house purchase, done that so no benefit here :(. Not sure if can invest in anything so doesn't look to attractive as an pension. It looks more like the beginning of a reform to be honest, I imagine something along the lines of stopping of pension relief for under 40s making this the more attractive option.

ISA limit to 20k is great news though, and some lower tax on income too!

cerat0n1a

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #8 on: March 17, 2016, 07:00:06 AM »
Sounds like a business opportunity ceratonia. You could provide "guidance" on the options to young people...
Giving financial advice is pretty strictly regulated here; the financial "services" industry need their cut on everything ;-) I'll have the option to have my advice ignored by my own children though...

I'd imagine the "help-to-buy" ISA will go once the lifetime ISA is available; seems like that will be the first & best option for anyone young who has aspirations to one day buy somewhere to live in Britain, once you're putting at least the minimum into your employer's pension.

Vagabond76

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #9 on: March 17, 2016, 07:33:37 AM »
Sorry, but any day in which the fractional reserve banking system continues is not a good day for savers.

Rightflyer

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #10 on: March 17, 2016, 07:43:35 AM »
Sounds like a business opportunity ceratonia. You could provide "guidance" on the options to young people...
Giving financial advice is pretty strictly regulated here; the financial "services" industry need their cut on everything ;-) I'll have the option to have my advice ignored by my own children though...


Yes, hence my quotes around "guidance".

You likely do not need any permission to: write an e-book, start a website, produce a financial literacy course, teach said course at night school, put said course on Udemy (or most appropriate UK website) etc etc.

 

Richardp10

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #11 on: March 17, 2016, 08:16:27 AM »
Not sure on the sugar tax, bit far removed from the values of economic liberalism that the party is meant to be about!

Do you think so? Principle of "sin taxes" is well established - we've had them on alcohol & tobacco decades after all. VAT already applies on some drinks (sugary soft drinks) but not others (milk, tea, coffee and er... hot chocolate...) and some food (e.g. cake but not bread.) As diabetes is costing the NHS more than 10bn per year, a slight nudge doesn't seem too disproportionate. The authoritarian approach would be to regulate the amount of sugar allowed in a drink, or ban them from being sold to under-16s or similar. Of course, a previous time the British government taxed sugar started the path to the American revolution.

I'm in 2 minds on the sugar tax, I'm not convinced sugar consumption has increased so it's more likely to be sedentary lifestyles causing obesity.

On sin taxes, the roads are full of cars and according to the government the nation is drinking itself to death so I don't think they work at all!

Extra tax like that is just a tax on the poorest members of society, as someone has mentioned below I think. It would be a refreshing approach to see the chancellor come out and admit they make enough in tax and that they need to control the spending but that would be very hard work and probably be the end of that persons political career.



daverobev

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #12 on: March 17, 2016, 08:22:19 AM »
Oh my god.. in Canada they cut the TFSA from $10k back down to $5.5k; in the UK the ISA goes up to (at current exchange rates) $38k.

Jealous.

cerat0n1a

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #13 on: March 17, 2016, 08:32:39 AM »
Interesting organisation, the Resolution Foundation, their chairman is a former Conservative minister.

I'd dispute some of the working out in that report. For example, the increase in allowances doesn't have the claimed effect on the top 10%, because you lose those allowances above 100k (was claimed 730K people affected when that change was made in 2011, so presumably more now.) Anything the government does to help savers tends to favour pensioners (who have ~90% of the UK's net wealth) over people of working age (who mostly owe huge amounts to banks).

Nevertheless, Tory chancellor screws the poor and gives to the rich is hardly a news story? The fact that in spite of cuts we don't appear to be on target to reduce government deficit is a worry.

frugledoc

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #14 on: March 17, 2016, 09:40:38 AM »
If I where in the UK, which I am not, I would not cheer because my own situation is improved at the cost of the most vulnerable in society.




To see what the Tories have done is quite sickening really.
Not sure how people can defend that.

Quote
Bottom 5th (people in UK) will lose 550 a year by 2020.

Top 5th will gain 250 a year by 2020.

A study done by the Inpedendant Resolution Foundation for all the budget etc since last May.

Yeah that sounds fair...

Source

Lots of tidbits on their Twitter.



The poor are quite well looked after in the uk, especially compared to the USA.  I pay enough in tax already thanks.  There is a reason why UK is number 1 destination for immigrants, and it's not its not the sunny weather!
« Last Edit: March 19, 2016, 09:50:01 AM by frugledoc »

Rightflyer

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #15 on: March 17, 2016, 09:49:09 AM »
Oh my god.. in Canada they cut the TFSA from $10k back down to $5.5k; in the UK the ISA goes up to (at current exchange rates) $38k.

Jealous.

Well, that's because, in Canada, we know better.
What could we possibly learn from the 1st and 5th largest economies in the world?

The UK and the US will cease to exist soon due to the high limits on Tax Free Savings Accounts...only Canada will survive, thanks to our new government!

(Sorry, heavy sarcasm alert should have prefaced the above...I just needed to vent)

cerat0n1a

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #16 on: March 17, 2016, 10:20:37 AM »
I'm in 2 minds on the sugar tax, I'm not convinced sugar consumption has increased so it's more likely to be sedentary lifestyles causing obesity.

On sin taxes, the roads are full of cars and according to the government the nation is drinking itself to death so I don't think they work at all!

The 5p charge on carrier bags seems to have worked pretty well.

Take your point on sugar not being the only enemy, but taxing armchairs seems a bit tougher to do :-)

mohawkbrah

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #17 on: March 17, 2016, 10:54:38 AM »
If I where in the UK, which I am not, I would not cheer because my own situation is improved at the cost of the most vulnerable in society.




To see what the Tories have done is quite sickening really.
Not sure how people can defend that.

Quote
Bottom 5th (people in UK) will lose 550 a year by 2020.

Top 5th will gain 250 a year by 2020.

A study done by the Inpedendant Resolution Foundation for all the budget etc since last May.

Yeah that sounds fair...

Source

Lots of tidbits on their Twitter.

explain this further, because i work near minimum age work 31 hours a week. And im still benefiting from the new changes. I skimmed the source and i can't find any clear stuff. Looks like just a bunch of jobsworth statisticians making graphs to make them selves feel important

daverobev

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #18 on: March 17, 2016, 11:45:21 AM »
Those posting "against" - just remember the last govt massively raised the tax free allowance from income. It's what, 10k GBP now (I'm out of touch) - it was only 6k a few years back, when I was working in the UK.

It sounds like the coalition was actually the best thing since sliced bread. Oh well.

comp@26

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #19 on: March 17, 2016, 03:11:28 PM »
Less tax and NI for the self-employed, lower capital gains taxes and RAISING the ISA limit to 20.000?
Am I dreaming?

Curbside Prophet

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #20 on: March 17, 2016, 03:17:05 PM »
Wow an incentive for saving?  That must be nice.  Here we just get ZIRP (maybe soon to be NIRP).  Spend!  Spend!  Spend!

The irony of the US economy (most developed economies really) is if everyone were Mustachian the economy would collapse.  We are massively dependent upon consumption.

dreams_and_discoveries

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #21 on: March 18, 2016, 03:14:33 PM »
Do Canadians not get similar tax breaks for retirement savings?

Personally as someone who aspires to FIRE at 40, this lifetime ISA seems far too limited, and much more restricted than a pension at first glance. Although, crunching the numbers, if the penalty to withdraw before 60 is only 5%, and you get 25% 'free' each year, it could still be beneficial to support an early retirement. My numbers do like quite precarious in the few years before I can access my pension, so this could be a good safety net - it can be accessed early. I'll read the details carefully when they come out, and if the figures stack up I may open one.


Rightflyer

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #22 on: March 19, 2016, 02:07:20 PM »
Do Canadians not get similar tax breaks for retirement savings?

Personally as someone who aspires to FIRE at 40, this lifetime ISA seems far too limited, and much more restricted than a pension at first glance. Although, crunching the numbers, if the penalty to withdraw before 60 is only 5%, and you get 25% 'free' each year, it could still be beneficial to support an early retirement. My numbers do like quite precarious in the few years before I can access my pension, so this could be a good safety net - it can be accessed early. I'll read the details carefully when they come out, and if the figures stack up I may open one.

Yes, we do. There are a number of retirement savings plans but the most used is the RRSP (Registered Retirement Savings Plan). You get a dollar-for-dollar tax deduction for your contributions i.e. every dollar you contribute allows you to deduct a dollar from your gross income for income tax purposes. The money in your plan is taxed when you withdraw it.
The government does not directly contribute any money to your savings plan.

We also have a TFSA which is analogous to your ISA. Taxed on the way in...grows tax free...tax free when you with draw. No government direct contribution.

As for the newly announced "lifetime ISA". If I was eligible (too old) I would be all over that to the maximum. An instant 25% return on your money! I would never turn down free money. I'm envious.

 

dreams_and_discoveries

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Re: UK Budget 2016 - good day for savers, good day for fat people
« Reply #23 on: March 19, 2016, 02:23:44 PM »
Thanks Rightflyer - seems the tax systems are really quite similar.

As for the newly announced "lifetime ISA". If I was eligible (too old) I would be all over that to the maximum. An instant 25% return on your money! I would never turn down free money. I'm envious.

See, it has a few too many catches, and is less beneficial than a pension for higher rate tax payers....we get 52% off pension contributions in effect from tax and national insurance savings.. even paying 20% tax at the other end, this seems favourable to 25% on the lifetime ISA's. Those who have maxed their pensions will no doubt make full use of it.