Simoney Kyriakou  

Fiscal Phil giveth and taketh away

Simoney Kyriakou

Simoney Kyriakou

Hail the princely sum of £12.70 a month. This is how much better-off I will be next year as a result of the tax changes in this year's Budget. 

Of course, my husband, who earns a shed load more than I do, was crowing about saving far more tax, but still, £152.4 a year is better than a kick in the teeth. 

Which is what this Budget largely avoided, at least as far as pensions and savings are concerned. For the time being, the pensions annual allowance remains untampered with, there have been no changes to the Lifetime Isa and even the lifetime allowance nudged up a fraction.

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Overall, the 76 minutes of my life I spent listening to Comedy Phil talking about all the tax giveaways in his pre-Brexit Budget were spent happily enough, with the big scare stories about slashing pension allowances being nothing more than that: a scare story. 

On the one hand, this has to bode well for savers. The tax incentives to put money away for the long-term still remain in place. 

On the other, however, big questions still remain about the economic impact of the 'giveaways', not least whether this money will end up becoming an inflationary force in the UK economy just in time for Brexit.

After all, what the chancellor gives us now can be pumped back into the economy to help shore it up in case of a poor deal scenario as people spend, spend, spend. 

This inflationary threat was even quantified in the documents that accompanied 'Fiscal Phil's' Budget, with the Office for Budget Responsibility signalling year-on-year inflation growth in the UK. 

And with figures from the Bank of England signalling ever-increasing levels of household debt, especially on credit cards and car financing, what this might mean for the ordinary man on the street is a tax give-away on the one hand and a burden of debt on the other.

A zero-sum game for the unadvised. So while the advisory community can breathe a sigh of relief over the lack of pensions tax tinkering, it behoves us all to pay more attention to helping clients making the most of the savings and pensions allowances that currently exist, before the pincer move of inflation and personal debt really start to bite. 

Simoney Kyriakou is deputy editor of Financial Adviser