Anna’s Accountancy Alerts – Week 9 (27th May – 2nd June 2024)

Savings

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Pension income needed to retire rises

The amount needed for a single person to have a moderate retirement has risen to £31,300, according to the Pensions and Lifetime Savings Association (PLSA).

The rising cost of living and an increased importance on socialising following the pandemic had pushed up the income required by £8,000, the PLSA said.

They estimated that a single person needed £14,400 a year for a minimum lifestyle, and £43,100 a year for a comfortable retirement.

Couples required a joint £22,400 at the minimum level, £43,100 at a moderate level and £59,000 at a comfortable level.

Nigel Peaple, Director for Policy and Advocacy at the PLSA, said:

Internet link: PLSA website

Which ISA is right for you?

Cash Isa

  • It works similar to a savings account.
  • The advantages are you don’t pay tax on interest.

Stocks and shares Isa

  • It works by holding a range of funds and shares in an Isa wrapper.
  • The advantage is you’ll never pay dividend of capital gains tax.

Junior Isa

  • It works similar to cash or stocks and shares Isa for children aged 0 – 18.
  • The advantage is you don’t ever pay tax on interest returns.

Lifetime Isa

  • It works similar to cash or stocks and shares Isa for those aged 18 – 39 at the time of opening.
  • The advantages are the government tops up contributions by 25% (max £1,000) a year, used to buy first home of when you reach 60.

Help to buy Isa

  • A cash Isa designed to help first-time buyers save for a deposit.
  • The advantages are you can no longer open one, but existing customers get a 25% government bonus and can pay in until 2029.

Relief at HMRC’s reversal of helpline closures

HMRC had announced that it was closing its self-assessment helpline for six months every year. It was also restricting the opening times of its VAT helpline and the usage of its PAYE helpline.

HMRC says it is halting these plans ‘in response to the feedback while it engages with its stakeholders about how to ensure all taxpayers’ needs’.

The FSB says that more investment in digital and telephone is needed – not a reduction in service.

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