Budget 2014: All you need to know
OBR upgrades growth forecast
The budget kicked off with news that The Office of Budget Responsibility (OBR) has upgraded its forecast of UK gross domestic product (GDP) growth in 2014 to 2.7%.
This is faster than the OBR's previous for previous forecast of 2.4% economic growth in 2014.
Osborne said that this was the biggest upward revision to growth for at least 30 years.
George Osborne then announced he will cut the income required for flexible drawdown from £20,000 to £12,000.
He also announced changes to the trivial commutation rules meaning that small pots up to a total of £30,000 can be cashed in.
'No one will have to buy annuities'
By abolishing a 55% tax charge on full pension fund withdrawals, together with the reforms to drawdown, the chancellor announced that he had effectively abolished the requirement to buy an annuity.
The government said it would
abolish a current 55% tax on withdrawals from pension funds. From April next year, people will be able to access pension savings as they wish at the point of retirement, subject to their marginal rate of income tax, rather than the current 55% charge for full withdrawal.
This news left a rather large hole in the pockets of some insurers...
You win some, you lose some
Shares of specialist annuity providers Partnership and Just Retirement took a
beating directly after the announcement of the pensions overhaul, plummeting 56% and 42% respectively.
Other insurers left to examine their wounds were Legal and General and Friends Life.
However, ISA changes (see next page) brought cheer to Hargreaves, which saw its share price spike by 14% from 1302p to 1499p.
The new ISA, unveiled today, will merge stocks and shares ISAs with their cash equivalents to create a new, super ISA.
It will have a limit of
Advice comes for free
Every person at retirement will now have access to free, impartial advice under new rules.
The chancellor guarantees
face to face advice for anyone in a defined contribution (DC) and private sector defined benefit (DB) scheme, in an initiative that will be developed using £20 million of government money over the next two years.
Personal allowance to hit £10,500
The government has increased the personal allowance to £10,500.
The amount an individual can have without it being taxed will be
increased to £10,500 next year, according to new rules.
Among moves to aid savings, Osborne also introduced a pensioner bond to help retired people suffering from low interest rates.
new pensioner bond, launched by National Savings and Investment (NS&I), will be available from 1 January 2015 and be available to everyone over 65.
The exact rates will be set in the autumn to 'ensure the best possible offer,' Osborne said. It would be something like 2.8% for a one-year bond and 4% on a three-year, he said.
Higher rate threshold to rise by 1%
The government will be raising the higher rate trigger for 2015/16 by 1% to £42,285 next year.
The move follows calls for Osborne to increase the higher rate trigger from £41,865 so fewer people with
modest incomes fall into the bracket.
DB to DC transfers under threat
The government is set to stop public sector pension scheme members transferring into defined contribution (DC) pensions, and is considering a ban on private sector defined benefit (DB) members too.
Transfers will only be allowed in 'exceptional circumstances,' it said.
Battle lines drawn on pension liberation fraud
The taxman has been granted more powers to help it fight the battle against pension liberation fraud.
Under the new rules, HMRC will be able to refuse to register a scheme, or de-register an existing scheme as well as enter business premises to inspect documents, if it so wishes.
Crackdown on tax schemes
The government announced it was getting even tougher on tax avoidance schemes, and aimed to bring in £4 billion in tax receipts from individuals who have used them.
Individuals will have to come forward and
pay taxes upfront and claim relief later, Osborne announced.
The government is to also investigate abuses of tax-efficient
venture capital trusts (VCTs) and Enterprise Investment Schemes (EISs),
And in other news, Brits will have a new pound in 2017.
The coin, also unveiled today, has 12 sides and has been developed specifically to guard against fraud.