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Budget's savings tax sting: here's how to dodge it
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Morning, Chancellor John Healey delivered his first budget this week and savers got a nasty surprise in the small print. We've got the ways round it, plus why buy-to-let landlords and household budgets are both under pressure. Grab a brew (green tea optional, see below) and let's get into it.
The Guardian Money
Budget drops Cash ISA cut but hits savers with new tax
John Healey scrapped the planned Cash ISA limit cut for under-65s, which is good news. But he surprised everyone with an extra tax charge on savings and property income instead.
- What changed: tax rates on savings interest and property income are going up, not down
- Why it matters: if you hold savings outside an ISA or get rental income, more of it will now go to the taxman
- The fix: there are still ways to shelter money, mainly by using ISA allowances fully before the new rates bite
This is Money
Where to stash your nest egg to dodge the tax grab
Following the budget, This is Money reckons smart savers could save around £2,000 by moving money to the right place before the new rules land. The piece walks through which accounts and wrappers still offer shelter from the higher tax rates.
This is Money
Landlords say the budget was the final straw
Buy-to-let has been a classic retirement plan for years, but hard-pressed landlords now say the latest tax raid might force them to sell up.
- The squeeze: rising costs plus the new property income tax make the sums harder to justify
- The flip side: experts quoted say there are still ways to boost profits if you restructure how you hold the property
- Why it matters: if property was part of your retirement plan, it's worth checking whether the maths still works
This is Money
Households now £176 worse off a month
Energy bills and food costs are eating up more of the average budget, and rising tax thresholds mean more people are being pulled into higher tax bands without their income actually rising much. It is the classic squeeze: costs up, take-home pay not keeping pace.
The Motley Fool UK
What £5 a day in an ISA could become
A cheerful reminder from the Motley Fool that small, regular amounts can add up in a Stocks and Shares ISA (a tax-free account for investing) over time. Nothing flashy, just the maths of compounding small sums consistently.
The Guardian Money
Mortgage-free at 45 by making modest overpayments
One couple cleared their mortgage a decade early after redundancy forced them to focus, saving themselves £30,000 in interest. Small, regular overpayments were the key, not some dramatic windfall. Worth a read if your mortgage still has years left to run.
Marcus's take
Budgets always come with a sting somewhere, and this time it is savers and landlords feeling it. The good news is the fixes are not complicated, mostly just using your allowances properly and checking your numbers before the new rates kick in. Meanwhile the £5-a-day and mortgage-overpayment stories are a nice reminder that boring, steady habits still beat panic. Small moves now, fewer headaches later.
One more thing
The Guardian taste-tested supermarket green teabags and the verdict ranged from "lovely" to "dark green dust". Choose wisely before your next budget-induced stress brew.
That is all for today.
Marcus
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