Money Changes for 2020
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There are a number of financial changes coming into place this year which could impact the way you manage your money. Here are a couple of updates and things to be aware of for 2020.
- Pensions – Lifetime allowance, State pension increase, state pension age to go up.
The maximum you can save into a pension before high tax charges apply is changing. The lifetime allowance will raise from £1,055,0000 to £1,073,0000 in April 2020. It’s worth keeping an eye on your retirement savings as tax charges can be as high as 55%.
The state pension will go up from £168.60 to £175.20 on 6 April 2020.
The state pension age will go up from 65 to 66 on 6 October 2020. The state pension age is due to increase again to 67 between 2026/2028.
- Savings – new tax year
The new tax year begins on 6 April. New ISA allowances of £20,000 will begin. If you already have an ISA and haven’t used your full 2019/2020 allowance then now is the time. You can’t roll over any unused allowance into a new tax year.
- Inheritance Tax
The additional amount you can leave to a spouse (also known as the residence nil-rate band) will increase to £175,000 (up from £150,000).
Married couples who use all their allowances can therefore usually pass on a property worth up to £1million to direct descendants before paying IHT tax.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.