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Budget: The Openwork Partnership’s Mike Morrow comments on what was – and what what wasn’t – announced by the Chancellor

Following Rishi Sunak’s Budget statement on Wednesday 27th,  Mike Morrow, Chief Commercial Officer at The Openwork Partnership, said: “The good news from the Budget for advisers is very much about what was not announced.

“Capital Gains Tax was left alone for now and there were no major announcements on pensions despite speculation that the lifetime allowance and the annual allowance could have been cut as well as the usual rumours about higher rate tax relief being replaced by flat rate tax relief.

“There was some good news for savers with the launch of Green Savings Bonds from National Savings & Investments which go on sale on Friday although the rate at 0.65% isn’t that tempting. Low earners will benefit from the abolition of a tax anomaly which means anyone earning less than the personal allowance threshold who save into a pension through a net pay arrangement doesn’t receive a tax bonus on their contributions. From 2024/25 they’ll be eligible for a 20% tax top-up from the Treasury at the end of the tax year which helps encourage saving.

“The Chancellor stressed how he was committed to cutting taxes by the end of the Parliament which is good to hear but we should not forget that he is raising taxes from next year with a 1.25% increase in National Insurance for employed and self-employed people plus a rise in dividend tax too.

“And of course, on top of all of that he confirmed that inflation is set to hit 4% next year which will hit everyone’s savings. Financial advisers will have their work cut out supporting clients but there will definitely be a lot of demand for their expertise.”

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