Today we revealed that four major life offices - and there may be more - have suspended processing business, while a further two have extended cancellation and guarantee periods, to allow people time to assess how the changes affect their decision. For all the details click here.
Pitch to savers
Alongside the liberalisation of pensions that could come to define George Osborne’s term as chancellor, this year’s Budget will be remembered for a pitch to savers that saw cash and stocks and shares Isas merged into a single tax-efficient savings vehicle with a higher annual limit of £15,000.
The chancellor also announced that the 10p rate on income from savings was being scrapped entirely, in a move that would benefit 1.5m low-income savers. Currently non-dividend savings income is taxable at 10 per cent on income up to £2,790, provided the saver has no other taxable income.
The chancellor said the government would “almost double this zero-pence band to cover £5,000 of saving income”.
Personal tax allowance
And alongside the pensions and savings gestures, Mr Osborne continued to follow through on the promise of his coalition government to lift more people of out savings by upper the income tax threshold below which no tax is paid to £10,500.
The higher rate 40 per cent tax threshold will increase for the first time this parliament, but it is another marginal and below-inflation rise from £41,450 to £41,865. Next year it enjoys another modest 1 per cent increase to £42,285.
If there was one non-Budget story to report in this sector it was the annual report of Resolution on Tuesday (18 March), which revealed that Sesame Bankhall more than doubled its loss in 2013 to £19m.
Resolution, which revealed it is rebranding to Friends Life, stated the advisory business had posted the full-year as it was forced to set up a provision following a review of past business, including pensions transfers.
Despite Sesame Bankhall’s losses, Friends Life’s UK division was able to post an operating profits before tax of £40m, an increased of £72m on the previous year.