Chancellor George Osborne’s fifth budget was categorised by most newspapers as one for savers and older people.
Savers benefit from a rise in the annual ISA allowance to £15,000 from 1st July 2014 and the freedom to put all that £15,000 into cash deposits if they want. It will also be possible for ISA investors to transfer from a stocks and shares ISA to a cash ISA, for example to reduce volatility risk ahead of taking. Older savers with low incomes will benefit from a nil rate of tax on the first £5,000 on income from savings from April 2015, which means that if you have no other income apart from the State pension your tax-free income can reach £15,500 a year. Older savers also get a new NS&I bond that will pay up to 4% interest. Most people with pension funds will benefit from the abolition of restrictions, which means they will not be forced to buy annuities.
Most commentators remarked that the list of beneficiaries matched closely to typical Tory voters. The economic analysts pointed out that the pension reforms (allowing individuals to t ake up to all of their pension fund in cash if they wished but subject to tax at their marginal tax rate) should actually bring money into the Exchequer and that because more people will pay higher rate income tax this year, the net effect of the Budget was that there were no net give-aways and no big winners.