The UK Autumn Budget – Key Points
The UK’s Autumn budget was released by the Chancellor Philip Hammond on 22nd November 2017.
In a pleasant surprise, there were no major announcements which significantly impact on UK pensions.
The main points of note included:
– An increase in the UK personal allowance to £11,850 from 6 April 2018. The higher rate of UK Income Tax will apply at £46,350 from 6 April 2018.
– The UK pensions Lifetime allowance will increase by UK Consumer Price Index inflation to £1,030,000 for the 2018/19 UK tax year.
– The basic UK State Pension will increase by the triple lock for those pensioners who are entitled to the increase (i.e. excluding residents in many countries abroad). The rise in April 2018 will be 3%, a cash increase of £3.65 per week for the full basic State Pension. The full new State Pension will also be increased by the triple lock, rising by £4.80 per week.
– The GDP growth forecast for the UK for 2018 has reduced. This has been revised down from 1.6% to 1.4% in 2018 and is also set to fall to 1.3% in 2019 and 2020, before rising slightly to 1.5% in 2021 and 1.6% in 2022.
– The only real impact on overseas pension schemes is that from April 2019, tax relief for employer premiums paid into certain overseas pension schemes will be modernised to cover policies when an employee nominates an individual or registered charity to be their beneficiary.
Prism Xpat Comment:
From a UK pension point of view, it’s rare to see a budget which does not tinker with the UK pension system. This is a welcome change for our clients who can now plan with some increased certainty for a period. There had been some talk of reducing the UK pension contribution allowances further, but this has not eventuated.
The increase in the UK Lifetime Allowance was expected and has risen by £30,000, following the recent uptick in the UK inflation rate which now sits at 3% (being above the Bank of England target inflation rate of 2%).
The decline in UK growth forecasts adds to the importance of maintaining a globally diversified portfolio of investments and pension holdings, and this is a feature we are actively considering for all our clients to maintain a strong level of ongoing growth over the medium term.
For full details of the UK Autumn Budget, please see the following link:
https://www.gov.uk/government/publications/autumn-budget-2017-documents
Taxation changes are outlined in Section 3 of
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/661480/autumn_budget_2017_web.pdf
Should you have any questions or wish to discuss further, please contact us and we will be happy to assist.