The Junior Isa allowance will be going up again from April 2019, following the Autumn Budget 2018 announcement.
Chancellor Philip Hammond revealed a change to the way National Savings & Investments (NS&I) premium bonds work, too.
Here, we round up what’s changing about personal savings and explain how to get the most out of your personal accounts.
- For up-to-the-minute coverage of the Chancellor’s announcement, visit our Autumn 2018 Budget live feed.
Junior Isa allowance
The Junior Isa allowance will increase in line with CPI inflation from April 2019 to £4,368.
This follows a rise earlier this year, when the allowance increased to £4,260 in April following the Autumn Budget 2017.
Junior Isas are tax-free savings accounts for under-18s. They can be opened by parents or guardians of children born on or after 3 January 2011, or before 31 August 2002.
Money placed into a Junior Isa can be accessed once the child turns 18. After this point, it will become a full Isa subject to the adult threshold of £20,000.
You can see changes to the Junior Isa allowance in our graph below:
- Find out more: Junior Isa rules and allowances
NS&I premium bonds
NS&I will now allow people other than parents and grandparents to gift premium bonds to a child. In addition to this, the minimum investment for premium bonds has decreased from £100 to £25.
A new premium bonds app will be launched as well to help make ‘saving with NS&I easier than ever’.
Instead of paying interest like a traditional account, each premium bond is entered into a monthly prize draw and winners are selected at random by NS&I.
Premium bonds offer the potential to win tax-free prizes of between £25 and £1m every month. NS&I is backed by the Treasury, which means that your money is 100% safe.
Check out our short video below to find out more about premium bonds.
- Find out more: what are premium bonds?
Isa limits and allowances
Adult Isa allowance
In April 2018, the allowance for adult Isas was £20,000. It’s set to remain at the same level for the 2019-20 tax year.
Remember that your allowance does not carry over into the next tax year, so consider topping up where possible.
You can see how the Isa allowance has increased in recent years in our graph below.
- Find out more: what are different types of Isa?
Lifetime Isa allowance
Introduced in April 2017, the Lifetime Isa is a tax-free savings or investments account which allows adults aged 18-39 to save up to £4,000 a year. For every £4 saved, the government will add £1 (worth up to £1,000 every tax year until the saver turns 50) – as long as the money is either used to buy the saver’s first-ever property or put towards their retirement.
The bonus is paid every month, allowing savers to benefit from compound growth.
It made a welcome addition to the range of Isas already available including cash Isas, stocks and shares Isas, Junior Isas, Help to Buy Isas and innovative finance Isas.
The Lifetime Isa rates are set to remain the same for the upcoming tax year.
- Find out more: what is a Lifetime Isa?
Help to Buy Isa allowance
Help to Buy Isas are tax-free savings accounts aimed specifically at people saving to buy their first home.
For every £200 contributed, the government will add an extra £50 towards buying your first home, up to a maximum of £3,000. The bonus is paid to your solicitor upon completion of your property purchase.
The £3,000 allowance on Help to Buy Isas will stay the same for the 2019-20 tax year.
Help to Buy Isas will only be available until 30 November 2019. After this date, no new accounts can be opened but existing account holders will be able to keep saving and qualify for the bonus.
- Find out more: Help to Buy Isas explained
The table below shows the historical Isa allowances since the 2016/17 tax year.
|Adult Isa allowance||Lifetime Isa allowance||Help to Buy Isa allowance||Junior Isa allowance|
Personal savings allowance
No changes were made to the personal savings allowance, which was introduced in April 2016.
This allowance allows you to earn interest of up to £1,000 tax-free if you’re a basic-rate (20%) taxpayer, or £500 if you’re a higher-rate (40%) taxpayer.
Additional-rate taxpayers – people who earn over £150,000 – don’t receive a personal savings allowance and will have to pay tax on all interest that they earn.
The examples below show how the personal allowance works in practice for basic and higher-rate taxpayers:
- You earn £20,000 a year and get £250 in account interest – you won’t pay any tax because it’s less than your £1,000 allowance.
- You earn £20,000 a year and get £1,500 in account interest – you won’t pay tax on your interest up to £1,000, but you’ll need to pay basic-rate tax (20%) on the £500 above this.
- You earn £60,000 a year and get £250 in account interest – you won’t pay any tax because it’s less than your £500 allowance.
- You earn £60,000 a year and get £1,100 in account interest – you won’t pay tax on your interest up to £500, but you’ll need to pay higher-rate tax (40%) on the £600 above this.
Child benefit rates for the 2019-20 tax year have stayed the same.
Eligible parents or guardians will receive £20.70 for their eldest/only child and £13.70 for each additional child.
Child benefit is a monthly payment from the government to anyone who is responsible for a child and you don’t necessarily need to be the child’s parent to receive it.
The table below shows current child benefit rates for 2019-20.
|Child benefit rates 2019-20|
|Number of children||Weekly child benefit||Annual child benefit|
For up-to-the-minute coverage of the Chancellor’s announcement, visit our Autumn 2018 Budget hub.
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Updated at 18:47 on 29th October 2018