As with all investing, your capital is at risk. The value of your portfolio with Moneyfarm can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and may be subject to change in the future. If you are unsure investing is the right choice for you, please seek financial advice.
Earlier today, the Chancellor Jeremy Hunt announced a raft of new changes as part of this year’s Spring Budget. In what many commentators believe to be the last budget before a general election is called, Hunt announced that the latest figures from the Office for Budget Responsibility (OBR) show that inflation is on track to fall below the Bank of England’s 2% target in just a few months’ time. While on growth, today’s OBR forecast shows growth to be around 0.8% in 2024, rising to 1.9% in 2025, beating many expectations.
In good news for motorists, the Chancellor also announced the continuation of the 5p freeze on fuel duty for a further 12 months. This, he says, will save motorists £50 a year on average.
As widely anticipated in the press ahead of the Spring Budget, Hunt also committed to a 2p cut in National Insurance, saving someone with a salary of £35,000 an average of £785 per year, according to research from the Telegraph. This is on top of the 2% announced in August, hopefully giving people some more breathing room to either spend or save more for their futures.
Perhaps the most notable announcement, however, was the introduction of a new ‘British ISA’ which will allow savers to invest another £5,000 tax-free into British equities. It’s great news that we have an extension to the allowance, something that has been stagnant since 2017. However, we still remain fully committed to a globally diversified approach to investment. As further details of the scheme are announced, we will analyse how we plan to incorporate the ‘British ISA’ into our Moneyfarm offering in a way that matches our high standards of portfolio management in our managed portfolios or in a way that can give clients as much freedom to express their views on our share investing platform.
On top of this, the Chancellor gave a nod to plans to create the pension for life, by suggesting ways to make it easier to transfer pensions once you leave a workplace. While he gave no details, we still stress that people shouldn’t wait and that pension consolidation is a key part of planning and can be done already. This will help people to bring down the costs of their pensions and make planning for retirement much easier. It’s never too early to start, so if you would like some assistance please feel free to contact us or book an appointment.
As always with budgets, the devil will be in the detail. Look out for our full analysis of this year’s spring budget in your copy of this week’s newsletter or read it any time on our blog.
Chris Rudden, CFA, Head of UK Investment Consultants: Chris is passionate about blending technology and human expertise to help people make better investment decisions to secure their financial future. With a keen interest in the impact macro economics has on investments, Chris has been at Moneyfarm for over 7 years now and is a chartered financial analyst with the CFA society.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
