Our Director of Financial Planning Gemma Williams provided commentary for BBC Wales on Budget day. Here’s her personal commentary on the Budget and what it means for you.

Budget Update

Budget day could be likened to entering the Grand National- there are bets placed on the likely outcome. There is a lot of jostling at the start (much like the scenes in the House of Commons) and the end result is not always the one that the majority had predicted.

This is a philosophy that I applied, as George Osborne entered his eighth budget (who knows whether this is his last as Chancellor) and i was approaching my third year as broadcast panellist for BBC Radio Wales. This time  I was accompanied by BBC Economics correspondent Sarah Dickins. As someone who always likes to be prepared and plan ahead, I have realised from this experience that it is not about knowing in advance about plans and policies likely to be announced, and how they affect our economy, because this is rarely achieved.

The day is all about listening to the Chancellor’s speech and taking what are complex economic and financial policies, and applying them to real life for us, how they will affect the clients of UNIQ Family Wealth and which groups of society will be better off as a result. Importantly, what are the long term trade-offs?

I was asked for my predictions during the earlier morning broadcast but felt at odds with the newspaper headings that reported that we were still struggling to relieve the UK of financial austerity because of the “global financial meltdown”. My interest in the Budget has always been from a financial perspective and not political but had sensed that the tone of these reports would preclude the outcome of the measures introduced some few hours later- and indeed they did, as the Chancellor told of our need to “act now so we don’t pay later”.

Businesses featured heavily in the discussions, as the Chancellor announced a fall in Corporation Tax to 17% by 2020, the small business rates relief would be extended from £6,000 to £15,000 to help smaller businesses and the abolition of the North Sea Oil tax (to help the struggling oil industry) were introduced to counterbalance some of the costs faced with the introduction of the new living wage and apprenticeship levy.

Investors and savers will be pleased with the large increase in the ISA allowance for 2017/18 to £20,000 (it is fixed at £15,240 for 2016/17) and surprisingly the largest cut in Capital Gains Tax to 10% for basic rate tax payers and 18% for higher rate tax payers that we have witnessed in recent times. The increase in the Income Tax Personal Allowance to £11,500 next tax year will save the average basic rate tax payer an additional £100 in tax. Perhaps the biggest surprise came with the introduction of the new “Lifetime ISA (now aptly called a LISA of course)” in 2017. Heralded as the new form of “pension” savings it is available to anyone under the age of 40 and unlike ISAs will attract a bonus from the Government of £1,000 for every £4,000 (maximum) saved each year. We do not see this launch as a direct threat or alternative to traditional pensions, which still hold vast benefits over this LISA such as the possibility of employers contributions, immediate tax relief for those making personal contributions and tax deductible expenses for those who pay contributions via their business but ISAs but it could serve as a useful additional savings vehicle for those who have already utilised their pension allowances.

I often get asked the question “how will the Budget affect the people of the U.K and the listeners of BBC Radio Wales” to which I simply say there will always be a balancing act much in the same way the Chancellor has to balance the nations finances. It is important for each individual to review the Budget against their own personal financial plan and for you, our clients, we will be discussing the impact of the announcements at our next meeting. In the meantime, as I leave the BBC studios behind, after a day full of anticipation and buzz, it is now up to our team to put the announcements into practice with the possibility of further “mini-Budgets” on the horizon.