The Budget 2021

The UK has been through a tough economic year, given people have lost jobs, people have been been put on furlough and there has been massive government spending. There has been a lot of money being pumped into the (successful) vaccination drive that will hopefully kick-start our recovery. A lot has been talked about the 'national debt' but given this is a fiat currency, this will always be the case... (possibly discussed at a later date). Rishi Sunak was given the unenviable job of creating a budget plan to try help the recovery which he reveal 2 days ago. Below are what I feel are the biggest changes in the coming tax years.

• Personal Tax threshold has been increased to £12,570 from April 2021 (from £12,500). This will stay at this level for the length of this government (April 2026).
• The higher rate tax threshold (40%) is also increased to £50,270 from April 2021 (from £50,000). This will stay at this level for the length of the government (April 2026).
• The primary threshold or lower profits limit (below which you won't pay any NICs) will rise; from £9,500 now to £9,568 in April 2021.
• The pensions lifetime allowance is freezing at £1,073,100 until April 2026. Previously they have said it would increase with inflation, but this freeze has already got doctor's unions up in arms. The annual allowance is still at £40,000 as well. 
• Capital gains (£12,300 / year) and inheritance tax thresholds (£325,000) are frozen until 2026. 
• ISA limits still at £20,000 a year. There was talk they may reduce it to claim back some money, but thankfully they did not.
• For home-buyers, stamp duty holiday will be extended, that is, no stamp duty on purchase of a house up to £500,000 until end of June. Also a new mortgage scheme to get a mortgage worth £600,000 with only a 5% deposit.
• Contactless payments up to £100, used to be £45 (Google pay and Apple pay have not had a limit for a while however). 
• The government will create a new Green Saving's Bond from NS&I. No news on what the interest will be, but money contributed will supposedly help environmental causes. Think it will depend on what the interest will be to see if this will be popular. 
• Air Passenger duty rates will increase from April 2021, at a rate inline with Retail Price Inflation. This is likely only a few £'s per ticket. 

In large, it's the best we could have expected. They could have gone back on their promise and increased tax or lowered the tax thresholds so at least they didn't do that. Sadly, with wages and consumer goods going up with inflation, the stagnant tax thresholds will mean less disposable cash in our pockets, especially in 2025/2026. With the vaccine drive going very well however, we can hope for some normality in the coming months, and with that, a greater chance of improving our personal finances and the overall economy.