The Chancellor, George Osborne, announced in his budget speech last Wednesday that the main personal tax allowance will go up to £8,105 from April 2012 .
The SAVVY Woman website notes : ‘This change follows the announcement in the emergency Budget in June last year that the personal allowance would rise by £1,000 to £7,475 from April 6th this year. While the main allowances are rising by more than inflation, the age-related allowances are not. If you’re aged 65-74, your personal allowance is currently £9,490, which will rise to £9,940 in April 2011. If you’re aged 75+ your personal allowance is £9,640, which will rise to £10,090 in April 11.’
The government has said it will consult on the options for merging tax and National Insurance. However, it’s not likely to be something that will be achieved quickly.
SavvyWoman.co.uk also reports that : “The Chancellor said that pensioners will not lose out in that they will not have to pay National Insurance beyond state pension age or on income such as savings, pension and dividend. However, as the state pension age is due to rise it does mean that people who work will pay National Insurance for longer. I’m often asked if you can stop paying NI once you’ve paid enough to qualify for a full basic state pension. The answer, sadly, is ‘no’.”
You can read the full report on Budget matters that maybe relevant to you at savvywoman.co.uk