There has been little movement in rates and limits, with no changes to the starting rate for savings or the main ISA annual subscription limits. The lifetime pension allowance has seen an increase in line with CPI, rising to £1,030,000 from April 2018.
The band of savings income subject to the 0% starting rate will remain unchanged at £5,000 for 2018/19.
The 0% starting rate for savings income has applied since 6 April 2015 to the first £5,000 of savings income, and is broadly available to individuals who have less than £16,850 (2018/19) of other income. Any other income that exceeds the personal allowance (£11,850 for 2018/19) reduces the starting rate band for savings income by an equivalent amount.
"It is not a surprise that there has not been an inflationary increase to this band, as it did not increase for 2017/18 either."
The ISA annual subscription limit remains unchanged at £20,000 for 2018-19. The annual subscription limits for Junior ISAs and Child Trust Funds will increase to £4,260 for 2018-19, in line with CPI.
"It is not a surprise that the ISA subscription limit has remained unchanged given the large increase in 2017-18. Although small, the increase in the subscription limits for tax-free savings for children is welcome."
The lifetime allowance for pension savings will increase from £1,000,000 to £1,030,000 from 6 April 2018
The lifetime allowance effectively caps the value that individuals can accumulate tax efficiently within their pension plans. It has been reduced on a number of occasions in recent years; the allowance was £1.8 million in 2011 and was reduced most recently from £1.25 million to £1 million from 6 April 2016.
"After several reductions in the lifetime allowance in recent years, those with pension funds approaching £1 million will be pleased to note that the Government has now decided to increase the allowance in line with the CPI measure of inflation. If continued, this policy should protect most individuals from having their pension savings exceed the allowance.
"Protections are available for those concerned about exceeding the allowance in future or whose pension savings exceeded £1 million at 6 April 2016. The availability is dependent on an individual’s particular circumstances and those who have not already done so should seek help to review their position as soon as possible."
Tax relief for employer premiums paid into life assurance products or some overseas pension schemes will be 'modernised'.
From April 2019, changes will be made to tax relief for employer premiums paid into life assurance products or some overseas pension schemes for their employees. This will be modernised to cover policies when an employee nominates an individual or registered charity to be their beneficiary, to receive the benefits of the life policy or pension fund on the employees' death.
"We are unclear as to what is meant by ‘modernise’, but would hope to the see consistency on tax relief for pension schemes and life assurance products."