Budget 2015: What can we expect?
Ahead of today's Budget, here are some changes we can expect Chancellor George Osborne to announce.
The Personal Allowance is already set to rise from £10,000 to £10,600 in April but it is thought Osborne will announce a further rise today, perhaps up to £11,000. This will work out at a £200 tax break for 27 million people.
The Chancellor may also raise the 40% tax threshold from £41,865 to £50,000 to help middle earners, while it is expected he will announce the scrapping of tax on income from savings for everyone except those paying the highest 40p tax rate.
Last year's Budget introduced major reforms to the pension industry, including the option for those aged over 55 to cash in their pension pot and do what they wish with it, which comes in April. Now the Chancellor is expected to confirm plans that will give five million pensioners the chance to cash in their current annuity from April 2016.
The Chancellor will signal the end of the annual tax return. It will be replaced by a digital tax account, which can be checked at any time online and will be introduced over the next five years.
It is expected Osborne will announce more than £12 billion of benefit cuts, restricting Child Benefit to three children for new claimants, while the overall welfare cap will be reduced from £26,000 to £23,000.
In exchange for any lump sum – usually your pension fund – an annuity is “bought” from an insurance company and provides an income for life. When you die, the income stops. Annuity rates fluctuate daily and depend on your sex (although from 21 December 2012 insurers will no longer be able to use gender as a factor when calculating annuities), age, health and a number of other factors, so you have to pick the right one and, once bought, its terms cannot be altered, so seek financial advice.