There is always a sense of nervousness ahead of Budgets about the impact on our personal finances, but most experts are not predicting big changes.
We have already had the manifesto-breaking pledge to increase national insurance, which will start to take a bite out of pay packets from next April. The feeling is that hammering core Conservative voters with further tax rises on property, pensions or other investments would be a risk too far — and the better than expected economic news reduces the pressure to do so.
For now, the “stealth tax rises” of frozen thresholds will drag more of us into higher rate bands as inflation (and pay) increases.
However, there is always an outside chance that future changes could be signalled. Moving rates of capital gains tax more in line with income tax is something that has been talked about for some time, but today does not feel like the day for sweeping reforms.
We could see some tidying up of anomalies, such as the inheritance tax advantages for money held within pensions for those who die before the age of 75.
There will be more pressure on the chancellor to do something to help alleviate the cost of living crisis as families face rising fuel, food and energy bills. He has ruled out a VAT cut, but could the “rabbit” be an increase to the Warmer Homes Discount for those on the lowest incomes, which has been stuck at £140 since it was introduced?
Helping families who are battling to balance their household budgets would be a shrewd political move before winter sets in.
Source: Economy - ft.com
