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What the Budget means for you

Phillip Hammond - CC photo via Flickr: https://www.flickr.com/photos/eu2017ee/36425390013

On 22 November, the Chancellor, Philip Hammond, delivered the Budget for 2018/19. We’ve picked out the measures which are most likely to affect people over pension age now and in the near future.

Pensions and benefits

State Pensions and benefits

  • The old State Pension and new State Pension will be increased by 3% from April 2018, a cash increase of £3.65 a week and £4.80 a week respectively.
  • The standard rate of Pension Credit Guarantee Credit will increase by £3.65 a week for a single person and by £5.55 a week for couples from April 2018. 
  • Pension Credit Savings Credit will increase by 20p a week for a single person and by 9p a week for couples from April 2018.

State Pension age

  • There were no announced changes to State Pension age. The government made an announcement in the summer outlining changes for 2017-18. The current State Pension age for men is 65. For women, it is gradually increasing from 60 to 65 and is currently 64 and 2 to 3 months depending on your date of birth. State Pension age will be increasing from 66 to 67 between 2026 and 2028. There will also be reviews every 5 years after that to look at State Pension age. Use the gov.uk State Pension calculator to find out your State Pension age.

Working-age benefits

  • The majority of working-age benefits, such as Jobseeker’s Allowance, will be unchanged. They are frozen at their 2016–17 levels for 4 years following the Welfare Reform and Work Act 2016.

Universal credit

  • Universal Credit is a new means-tested benefit for working-age people. It’s gradually being introduced nationally and will replace income-based Jobseeker’s Allowance, income-related employment and support allowance, Housing Benefit, Income Support, Working Tax Credit and Child Tax Credit. The roll-out will be complete by December 2018.
  • A number of measures have been announced to reduce the wait time for the first payment.
  • From April 2018, if you already receive Housing Benefit you will continue to receive this the first two weeks of your Universal Credit claim.

Private pensions

  • Lifetime allowance for pensions will increase in line with the Consumer Price Index (CPI), rising to £1,030,000 for 2018-19. This is a limit on the value of payouts from your pension schemes that can be made without triggering an extra tax charge. These payouts could be lump sums or retirement income.

What extra money are you entitled to?

On average, our benefits calculator identifies an extra £250 per month for each person. How much money could you claim?

Tax changes

Tax allowances and thresholds

  • The amount of income you can earn before you pay tax - the personal allowance - will increase from £11,500 to £11,850 in April 2018.
  • Basic rate tax will be payable on taxable income up to £34,500 and the higher rate threshold will be set at £46,350.
  • The Marriage Allowance allows you to transfer up to 10% of your unused personal allowance to your partner, reducing your tax bill by up to £230 a year in 2018-19. The government will now allow claims in cases where a partner died before the claim was made. These claims can be backdated by up to 4 years.

Savings

  • The ISA annual subscription limit for 2018-19 will remain unchanged at £20,000.

Council tax

  • Local authorities will be able to increase the council tax premium on empty homes from 50% to 100%. This means you could pay up to 200% of the council tax on that property.

What extra money are you entitled to?

On average, our benefits calculator identifies an extra £250 per month for each person. How much money could you claim?

For more information call Age UK on 0800 055 6112

 

Last updated: Dec 11 2017

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