So the most political of Chancellors raised to his feet to deliver his 8th Budget in a year which is not only pivotal to his long-term economic plan but importantly to his long-term political plan.
The scrapping of the Money Advice Service, Pension Advisory Service, and Pension Wise may seem illogical when the government is pushing for increased financial education and continually seeking ways to open up the avenues for the public to receive access to advice.
The use of commissioning to find providers to plug the gap may provide an opportunity for many in the Third Sector, who have been or are involved in this space, to fill the gap and replace much of the funding lost over the last few years by widening the range of services which they offer.
Yet this seems to be a backwards step for many, as with shrinking numbers of advisers in the UK and the access criteria increasing all the time, it seems a retrograde move when the Chancellor has laid out his plans to create a society with greater financial inclusion.
The Chancellor also announced slimming down the level of funding in the future.
When it came to stamp duty, this Budget created a levelling of the playing field after the welcome changes introduced in last year’s Budget for residential property, providing the potential for significant cuts in costs for SME business when purchasing new premises.
The removal of the slab rates and introduction of tariff rates reduced further barriers to investment for many small businesses in the UK.
For a business purchasing a property at £260,000 this is a saving of £4,300. Could this be the springboard for increased investment into commercial property by the UK business owners? Would this lead to an expansion in commercial park building across the UK helping to kick-start the economic recovery?
Commercial agents I have spoken to will be ecstatic at this welcome boost to the Commercial Market with an anticipation that many businesses will bring forward their investment decisions.
Also, the Chancellor spoke at length in his Budget speech about the creation of the Northern Powerhouse and the investment into infrastructure.
An interesting question is whether we will see the age for access to pension funds increase to age 60But he said little specifically to support house building and homeownership in the UK apart from the significant announcement of the Lifetime Isa, which is to be used as a springboard for either saving towards a home deposit or to be used at age 60.
An interesting question is whether we will see the age for access to pension funds increase to age 60.
There was also a small respite in the buy-to-let space for those who may be purchasing a second property before the sale of their first with an increase in the time frame to claim the additional rate of stamp duty from 18 months to 36 months.
The major announcement is that significant investors both personal and corporate will also be subject to the additional rates of stamp duty, levelling the tax burden with those smaller investors who have purchased a smaller number of properties as part of a blended portfolio.
This might help the Chancellor’s plans to take steam out of the buy-to-let market, as previous announcements merely created a house-buying frenzy for landlords prior to the end of this tax year.
Lee Clark is a chartered financial planner for Brewin Dolphin
