The Chancellor Philip Hammond today delivered his second Budget in the House of Commons. But behind the key points and breaking headlines, what was included of note for the financial service sector? Here is the DYNAMIC PLANNER take on today’s speech.
Mr Hammond made broadly positives noises about investment in technology, but did not go further and specifically reference FinTech (finance technology).
People’s tax-free personal allowance will rise to £11,850 in April 2018 (and to £12,500 from 2020/21), while the higher-rate tax threshold will increase to £46,350 (and again to £50,000 from 2020/21). The pensions lifetime allowance will rise in line with inflation from £1m to £1.03m to match CPI (Consumer Price Index) from 2018/19.
The annual ISA subscription limit remains at £20,000 in an Autumn Budget which did not go out of its way to court savers.
Mr Hammond had already announced earlier this year that the dividend tax allowance will drop from £5,000 to £2,000 in April 2018.
It was wise to not build heady hopes up prior to this lunchtime. Usual practice, in the days immediately before a Budget, is to drip feed ‘good news’ headlines prior, to help ensure they each receive maximum media exposure, while, cynically, all the ‘bad Budget news’ is saved and compressed into one news cycle on the day itself.
The good news drip feed had been uncharacteristically quiet early this week, save largely small measures to try and excite Millennials - driverless and electric cars to be rolled out, e.g., alongside new discount railcards for 26-30 age bracket.
There was always going to be a black hole in today’s Autumn Budget created by downgraded growth forecasts - UK productivity remains stubbornly flat, he bemoaned in the Commons today - money needed to fund the Conservative-DUP agreement signed in June 2017 after the hung parliament and pressure to roll back austerity. It was hard to see where money could come from when Theresa May’s government is so short of political capital. Tory divisions on Brexit further mean Mr Hammond faces pressure from both the left and the right. Labour leader Jeremy Corbyn today said Mrs May’s government had a ‘record of failure with a forecast of more to come’. Time will tell how significant today’s Budget was.