Budget

talexuser

They had a pensioner on the news just now saying how wonderful the budget was for pensioners who have suffered from such low savings rates for so long....

The pensioner bond (NS&I) will only be available from next January, be 4% on a 3 year fix, max £10000, with withdrawal of the bonds as soon as they get 10 billion in.

Have I got this right, 4% on £10000 is £400, £320 a year after tax, and this is the great savior for pensioners?

On the other hand the 15 grand limit on ISAs suits me just fine!

Cuckooclock

Don't see how ISA saving limits can affect pensioners unless you are quite wealthy, I would be suprised if they can afford to save.

Grumps

Do we know any detail on this part yet?

The "surprise" which was the focus of speculation ahead of the 55-minute speech came at the end as Mr Osborne said cash and share Isas were to be merged into a single New Isa

I have both Equity ISA's and a Cash ISA and am about to retire. I don't have an Annuity but I have an Occupational pension.

I have long been minded to 'drawn down' on some of my Equities in favour of Cash.

Will this mean that I can now move proceeds from Equity ISA's into a Cash ISA as 'old money' without any penalties or any effect on any 'New Money' going into a Cash ISA?

innovate

Just because someone is a pensioner, the pensioner bond isn't the only bit of the budget that could be relevant.

Like for yourself, a £15K ISA allowance will be welcome to many pensioners. Drawing a pension doesn't mean everyone stops feeding new ISAs every year. Many will also love the abolition of the 10% starter tax rate, and the associated £5K tax free savings. The personal allowance applies to pensioners just as it applies to anybody else. And many will be able to get more from their pension savings since they don't have to buy an annuity by the time they get to 75. That's a huge benefit for some people.

But even if it was a mere £320 a year, what's the problem? It's a month's worth of free eating for many.

badger09

I don't consider myself 'wealthy' but this is great news

And I am a 'pensioner'

innovate

Grumps wrote: »

Do we know any detail on this part yet?


Will this mean that I can now move proceeds from Equity ISA's into a Cash ISA as 'old money' without any penalties or any effect on any 'New Money' going into a Cash ISA?

Huge amount of detail on the ISA board. Yes, you will be able to transfer from S&S to cash ISA from July, without it affecting your annual allowance. You must follow the formal transfer process for this to apply.

melbury

innovate wrote: »

Just because someone is a pensioner, the pensioner bond isn't the only bit of the budget that could be relevant.

Like for yourself, a £15K ISA allowance will be welcome to many pensioners. Drawing a pension doesn't mean everyone stops feeding new ISAs every year. Many will also love the abolition of the 10% starter tax rate, and the associated £5K tax free savings. The personal allowance applies to pensioners just as it applies to anybody else. And many will be able to get more from their pension savings since they don't have to buy an annuity by the time they get to 75. That's a huge benefit for some people.

But even if it was a mere £320 a year, what's the problem? It's a month's worth of free eating for many.

Innovate,

I know this is probably a stupid question, but I don't understand exactly who will benefit from the abolition of the 10% savings rate. Please could you put into very simplistic terms for me:o I don't think I personally will benefit.

Thanks.

Murphybear

I will be drawing state pension next March, aged 62.5. I will not be able to buy the new Pensioners Bonds for a further 2.5 years. Would anyone care to hazard a guess as to the logic of this?

talexuser

innovate wrote: »

But even if it was a mere £320 a year, what's the problem? It's a month's worth of free eating for many.

They are not getting £320 a year extra. They are getting the difference between 4% (if they can get in before withdrawal) and the best 3 year fix on the market which they could otherwise get say 2.7%. Maybe an extra £100 a year.... hardly earth shattering.

badger09

melbury wrote: »

Innovate,

I know this is probably a stupid question, but I don't understand exactly who will benefit from the abolition of the 10% savings rate. Please could you put into very simplistic terms for me:o I don't think I personally will benefit.

Thanks.

Clearly I'm not innovate but doe this help? (from the main site)

10% savings tax rate scrapped

At present, some low earners are charged 10% tax on savings interest, rather than the usual 20%. You qualify if your total earnings are less than the total of your personal allowance, plus £2,790.

In this scenario, the first £2,790 of taxable income on your savings is taxed at 10%.

But from April 2015 this group will not be charged any tax, AND the group will become even larger. From then, you will be able to earn £5,000 above your personal allowance in savings income without being taxed.

The Treasury says that effectively, it means anyone with a total income of less than £15,500 per year (the £10,500 personal allowance plus £5,000) will no longer pay any tax on their savings income.

badger09

Murphybear wrote: »

I will be drawing state pension next March, aged 62.5. I will not be able to buy the new Pensioners Bonds for a further 2.5 years. Would anyone care to hazard a guess as to the logic of this?

I would hazard a guess that 'they' have to draw the line somewhere

If its any consolation - and I accept it probably isn't - I'll be 65 in February 2015, by which time the allocation of Pensioner Bonds will probably have been filled. Disappointed? Yes -but that's life and it isn't always (perceived to be) fair .