New tax year - changes and new rules

6 April 2016

the writing's on the wall...

Wave goodbye to the old tax year, and say hello to the new! And, there's going to be some changes, which you should know about.

There's a number of new policies, which include a new State Pension system, the much muttered about higher personal tax threshold, a change in the way income tax is calculated for the Scots, and a reduction in the amount of tax you have to pay on your savings.

It is pensions that has a lot of the big changes, given that the Government have created a new 'single tier' pension, after getting rid of the old Basic and Additional pension schemes, which have been around for years.

The Government think this new way of doing things is going to make everything much more simple for everyone. We'll see. Either way, if you've paid National Insurance contributions for at least 35 years at the time you retire, you'll get a flat rate of £155.65 per week. If you have contributed for less than 35 years in total, but over 10 years of your working life, you'll get less.

George Osborne said of it all: "Today's reform of the State Pension is the most significant since its inception. The new system means that at last, people will have certainty in what they can expect from the state in old age - and for many women and the self-employed, it will be more generous."

"People will know that the full amount when they reach state pension age will be over £8,000 a year in today's money, so they can plan other retirement saving they may want on top."

As for your savings, where once you got taxed on interest earned on savings at the same rate as income tax, you can now get yourself up to £1,000 worth of interest, and you won't have to pay anything.

TOPICS:   Investments   Economy

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