Chancellor George Osborne kicked off his Autumn Statement speech this afternoon with good news for savers.
Alongside a £100 rise in the income tax threshold to £10,600, the limit that can be saved in a new individual savings account (ISA) rises to £15,240. More good news followed as Osborne announced ISAs can be inherited tax free. The same applies to those inheriting an annuity from those dying under the age of 75.
'The Chancellor has essentially announced that ‘’your savings are yours, we have no right to take from you,' says Calum Bennie of ISA provider Scottish Friendly.
'This is a good first step in ensuring that families benefit from generational wealth, meaning that parents who have spent a lifetime saving for their children, no longer have to worry about this being eaten away in tax following their death,' he adds.
This brings some comfort to savers during a period of poor returns due to low interest rates.
Tax, tax, tax
There was encouraging news, however, for those wishing to invest in property. Osborne has reformed the stamp duty rules so there is no tax to pay on properties bought for £125,000, before rising to 2% on houses worth up to £250,000. The taper then rises to 5% on properties bought for £925,000, 10% up to £1.5 million and 12% on all higher valued properties.
Guy Ellison, head of UK equities at Investec Wealth & Investment, says the stamp duty changes will benefit the majority, but not those at the top-end of the market.
'From a market perspective this could weigh on the London-centric house builders and estate agents, for example Berkeley (BKG) and Foxtons (FOXT), while potentially favouring the more regional developers,' he adds. Foxtons is currently trading 6% off at 146p.
But investors may be a little aggrieved by the Chancellor's decision to raise the business tax rates for large, multi-national companies. Osborne has slapped a 25% charge on profits generated in the UK, potentially leaving less in the pot for shareholder dividends.
Muted market reaction
The UK stock market largely shrugged off these measures with much of the information previously leaked. The FTSE 100 index is off a modest 20 points in mid-afternoon trade on Wednesday to 6,724.
However, airline stocks EasyJet (EZJ) and British Airways-owner International Consolidated Airlines (IAG) make ground after the Chancellor froze fuel duty and scrapped air passenger duty for under-12s from 1 May next year and for under-16s the following year.
Meanwhile, the Chancellor has limited the size of the profits banks can use to offset past losses to 50%.