AFH's head of advice Austin Broad comments on
today's Budget

In his Budget this afternoon the Chancellor once again revised his forecasts for growth and GDP. As he spoke the pound fell by 0.2% against both the euro and the dollar. The FTSE100 fell by 20 points.

The Chancellor was careful to increase our personal allowance by just more than inflation. And while it seems that inflation may have peaked, there looks to be little good news for savers on the interest-rate front.

The world continues to present a volatile face for investors. And as people live longer and want a better life for themselves after they finish work, the importance of financial planning to achieve our future objectives has never been greater.

The Chancellor’s moves to increase housebuilding, including the scrapping of Stamp Duty for many first-time buyers, means that hopefully many more young people right across the UK will soon be able to realise their dream of owning their own home.

The fact that this obstacle has been permanently scrapped means that young people saving for their first home could get a bit extra help from the Help-to-Buy ISA.

There’s no minimum monthly saving for Help-to-Buy ISAs. And couples can have one each if they are both first-time buyers. And as long as you save £1600 and use that money to buy your home, the government will give you 25% on top of your savings, up to a maximum £3000. And as it’s an ISA, it pays interest and it’s tax free too.

What that means is that a couple who each saved the maximum £200 a month, and saved the £2,500 they would previously have had to pay in Stamp Duty, they would be able to save a 5% deposit on a £250,000 house in just 19 months.

For people between 18 and 40, there’s also the Lifetime ISA. You can save up to £4,000 a year, and the government will again add 25% to the amount you save each year. Usually you’d lose that bonus if you withdrew your money before you retire, but you can keep it if you use your ISA to buy your first home.

So the help is out there.

Of course, once you have your home, you’ll want to plan for the future to make sure you continue to enjoy it. And that’s where we come back to financial planning.


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