Was the Budget boom or bust for personal finance?
PEER-TO-PEER lenders are split about the outcome of the Budget for people’s finances.
RateSetter said there was “a notable absence of measures to help people put away more for the future” in Wednesday’s fiscal event, but Lending Works called it “a boost for personal finance”.
“Following increases in previous years, the Individual Savings Account (ISA) tax-free allowance is to remain at £20,000 in the next tax year, and the personal savings tax-free allowance stays at £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers,” said RateSetter in a blog post on its website on Thursday. “This translates into a cut in these allowances when inflation is taken into account.”
The ‘big three’ lender went on to say that “for those who choose to accept some risk in exchange for potentially higher returns, by investing their money, it is rather disappointing”.
Conversely, consumer P2P lender Lending Works heralded the fact that the annual ISA allowance is remaining at £20,000, saying there had been speculation that it could be reduced.
Other elements of the Budget that the firm called “a boost for personal finance” in a blog post on its website on Thursday include the higher minimum wage and “no assault on insurance premium tax”.
The firm also highlighted “good news with regard to the income tax threshold”, which is increasing to £11,850 in 2018, while the higher tax threshold will rise to £46,350.
The most headline-grabbing elements to come out of Wednesday’s Budget were the scrapping of stamp duty for first-time buyers on homes worth up to £300,000 and gloomy economic forecasts from the Office for Budget Responsibility.