/ Money

How does the Chancellor’s 2014 Budget affect you?

Budget bag

Did you tune in to the Chancellor’s Budget announcements? How was it for you – do any of the proposed changes have an impact on you and your finances? Here’s our digest…

There was some good news for savers as the Chancellor announced that the Isa allowance is being changed to one single and simple £15,000 allowance. So instead of keeping £5,760 away for a rainy day, from 1 July you can bump that up to £15,000 (if you’ve got the money that is) and flit between cash and the stock market with your entire balance. And the 10p tax rate for savers is also to be abolished.

A new Pensioner Bond from National Savings & Investments will also be launched in 2015, with up to £10bn of these bonds issued and a maximum of £10,000 can be saved in each bond. These will pay 2.8% for a one-year bond and 4% in a three-year bond tax-free – well above current market rates.

And the Junior Isa allowance is increasing to £4,000 with transfers from CTFs to Junior Isa set to be allowed from 6 April 2015. Good news for all those who shared their concerns over not being able to turn their child’s trust fund into a Junior Isa over the last few years.

Major changes in pensions

George Osborne also announced a radical overhaul of pension savings and the ways that you can access them. The big announcement is that, from next year, you’ll be able to withdraw your entire pension savings in one go if you wish – no longer will you need to buy an annuity to convert your savings into an income. And you won’t face a 55% tax for doing so, just paying tax at your marginal rate.

But Mr Osborne also introduced some short-term changes. From the end of March, the income requirement for flexible drawdown will fall from £20,000 to £12,000 and the capped drawdown limit will rise from 120% to 150%.

The size of the lump sum small pot will rise five-fold to £10,000 and the total pension savings you can take as a lump sum will almost double to £30,000.

On the housing front, the first part of the Government’s Help to Buy scheme, Help to Buy equity loans, will now run until the end of the decade. Government-backed Help to Buy equity loans are available to help people with a 5% deposit to buy a new-build property. And Mr Osborne also announced that 15,000 new homes will be built in Ebbsfleet, Kent, as part of a new garden city development.

So what were your budget highlights – the new 12-sided £1 coin, the potential to boost your Isa allowance of the hope of changes to your potential retirement fund?


When news of the new £1 coin was announced I immediately wondered whether this was in some way connected with the possible secession of Scotland in the event of a referendum majority in favour – especially since the new coin would not be introduced into circulation until 2017. If the two kingdoms in a disunited realm would not share the sterling currency, there would be advantages in strong differentiation between the coinage. Already, the Pound coin is very close in size to the One Euro coin so a change is desirable. The obverse design of the new coin is clearly marked Elizabeth II which would be incorrect in an independent Scotland as Queen Elizabeth I was not a Scottish monarch.

D B Keating says:
21 March 2014

Your reasoning anbout the introduction timing is likely correct but the statement as to whether Elizabeth II is relevent to an independent Scotland is a little hypothetical. It has already been stated that Scotland would have to develop its own currency. In fact, it may have to develop two currency regimes, like a lot of other countries which try to base their economy on oil and gas extraction, The US$ would be used for international trade and another currency, shall we call it the Alba, would be used for domestic transactions.

John McIrvine says:
23 March 2014

Why call it the Alba ? I wasn’t aware the rest of the UK had the sole right to use the word ‘Pound’


Sorry if you vote to leave the Union then you leave EVERYTHING behind and start again as all others have done in the past eg South Afria, India etc.
I was born in England and have resided in Scotland for 42 years but I’m still British as on my Passport, and always will be. If Salmond and his followers have their way then they will no longer be eligible for a UnitedK passport. The same applies to Currency.

Ali Sco says:
23 March 2014

Nor will you. If everything has to change then a new name will be needed for the UK which will according to your logic have ceased to exist


Currently UK is comprised England ,Scotland and Wales
Great Britain is England, Scotland, Wales and N Ireland.
So there still be a United England and Wales as they have so far not indicated to withdraw.

Ali Sco says:
24 March 2014

I wouldn’t imagine the name of Great Britain as an island wouldn’t change and would still comprise the countries of England, Scotland and Wales. The country which also incorporates Northern Ireland and of course all the other islands such as Orkney etc is currently called the UK and this is what the passports hold of course. It would have to mean that Scottish residents would no longer hold a UK Passport as if Scotland becomes independent then there would be a need for Scottish passports
Of course this leaves the other countries with a decision regarding the name of the rest of the Union. I personally would see no reason why it would need to change but possibly it should. The name came about following the unions of the Scottish and English crowns after all


Replying to Brian . . . Actually, Northern Ireland is not part of Great Britain. The UK’s full title is the United Kingdom of Great Britain and Northern Ireland. Great Britain comprises England Scotland and Wales. England, Wales and Northern Ireland would still be able to claim the title “United Kingdom” if Scotland left, and any country can call its currency unit the Pound just as many have chosen to use the word Dollar. The Kingdom of Scotland would also be able to mint a coin that was virtually identical to the UK’s new pound coin if it chose to.Maybe it would be divided into 100 Groats [or Bawbees perhaps]. Scotland could also keep anything with the word “Royal” as a prefix and I believe the appellation “Her Britannic Majesty” would still be correct in the invocation printed on the inside cover of a Scottish passport.


Many thanks for the correction.