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2020 is going to be a year of change: Brexit, a large conservative majority and plenty of proposed changes to financial laws. In today's article, we'll talk about how all this will affect your finances in 2020.
It's important to be aware of how all the changes will affect your finances in 2020. So today we'll give our top 5 things to keep an eye on.
1. State Pension Age
It seems like every year there's another Act passed that plans to raise the state pension age.
This may seem a long way off, but it's worth keeping in mind how this will affect you. In 2020, the State Pension age for both men and women will move to 66 (by October).
The Pensions Act of 2007 actually contains provisions for what's going to happen between 2044 and 2046. We'd take that will a pinch of salt. (For what it's worth, the age will go up to 68).
Check out the official documentation from HMRC for all the details.
2. Universal Credit & Benefits Rise
Universal Credit is expected to rise by 1.7% in April. This would be in line with inflation. This comes after a period of freezes and caps.
There should be similar rises for legacy benefits. However, later in the year, the government will start moving more people onto Universal Credit.
Universal Credit has been controversial (there have been calls for Iain Duncan Smith to lose his Knighthood). But it looks like it's here to stay.
3. A Rise in Train & Alcohol Prices
Train fares are going up in 2020.
The increases are linked to inflation, so it looks like they will rise by an average of 2.7%. This will obviously have a big affect on your finances in 2020 if you're a commuter. Among the increases for season tickets:
- Reading to London - up £132 to £4,736
- Gloucester to Birmingham - up £118 to £4,356
- Glasgow to Edinburgh - up £116 to £4,200
There are also plans to set minimum prices on alcohol. A minimum price of 50p per unit would mean a can of beer would have to be sold for at least £1. A bottle of wine would struggle to be much under a fiver.
4. More Generous Inheritance Tax Rules
George's Osborne's pledge to raise the inheritance tax threshhold in 2007 was incredibly popular. It even spooked then PM Gordon Brown into shelving plans for a snap election.
Now, 13 years later, families can pass £1m of their wealth tax free. This is the maximum, and relies upon owning your "main home" and being married.
For more information, check out our post on inheritance tax.
5. Changes to Property Laws
2020 will see changes to some important areas of property tax law.
First of all, the mortgage rules for private buy-to-let landlords are changing. We discussed this in a previous post on buying property through a limited company.
Also, councils will be able to double the tax bill on empty properties. At the moment, they can only increase by 50%. From April, that increases to 100%.
If you'd like to discuss any of these issues with us, please get in touch. We can arrange a free, no obligation meeting at your office.