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This Spring Budget is arguably the last-ditch attempt for the Conservatives to win back a disgruntled electorate, as well as those who are feeling the effects of both the tax pinch and an increased cost of living. But how will the Chancellor use the tools available to him to try and steer his party towards victory without having a detrimental effect on the future economy. Traditionally, tax cuts usually precede a general election; it is a fine line to tread, but has the Chancellor found a happy middle ground?

Next stop should be a General Election, yet it felt like the Chancellor only gave us a taster of their future plans. Does this therefore mean we are heading for a later election, which needs to happen before 28 January 2025, giving the Chancellor a last bite of the cherry in the Autumn Statement.

Download a full summary of the Spring Budget policy and tax changes PDF

Income tax

Having mentioned on more than one occasion there could be an Income Tax or National Insurance rate cut on the cards, it was hard to see the Chancellor not follow through on this; the speculation was more around how low would he go?

A National Insurance rate cut was favoured by the Chancellor, however, what we really needed was the unfreezing of income tax thresholds to do something about the tax burden being at a multi-decade high.

The Personal Allowance and the higher rate tax threshold have been frozen since 2019 and are due to be held until 2027/28, on top of record levels of inflation. This has had a huge impact on spending for all, including an expected 3.2 million more lower-paid workers who will have been pushed into paying income tax by 2028.

As salaries continue to increase and tax thresholds remain constant, more and more people earning above £125,140 continue to lose their Personal Allowance. Whilst not good for clients, this could help showcase the need for considered financial planning such as gaining some of the Personal Allowance back through pension contributions, as well as potentially utilising investments that offer tax relief.

National Insurance

National Insurance and Income Tax rate cuts had been widely speculated in the run-up to the budget. Cutting National Insurance to a starting rate of 8% is a cheaper alternative to cutting Income Tax for the government, around £4bn less.

A 2p cut in Income Tax could potentially save someone earning £50,270 the sum of £754 per annum. A 2p cut in National Insurance would do the same for workers all other things being equal but since it is the second such cut in just a few months the saving compared to 2023/24 is much bigger – totalling £1,320; National Insurance was 12% for the first nine months of the current tax year, falling to 10% in January. So in effect, the year-on-year cut is from 11.5% to 8% - 3.5 percentage points. This is part of the Chancellor’s promise; to reduce the tax burden on working families.

A 2p cut in Income Tax would have cost the exchequer in the region of £14bn, whereas a 2% cut in National Insurance will cost a slightly lesser £10bn and satisfies the Chancellor’s promise to reduce the tax burden on working families.

This cut is focused towards incentivising work and continues to narrow the gap between earned and unearned income. This is a good result for every client who pays National Insurance.

Inheritance Tax

There was a lot of noise in the run-up to the Autumn Statement around the potential scrapping of Inheritance Tax (IHT), but this has since died down. With IHT receipts continuing year on year to be at a record high, there have been calls for reform. The latest data shows estates paid £6.3bn to HMRC between April 2023 and January 20241. However, with such bumper figures, it was unlikely to be scrapped altogether, especially as it impacts relatively few families in comparison to income tax or National Insurance. We could see proposals for change in the Conservatives’ election manifesto.

It continues to remain relevant for clients to seek advice if they have a large Estate and potential IHT liability in order to reduce the tax take on death.

Capital Gains Tax

Capital Gains Tax arising from residential property is set at a higher rate than gains on other assets. However, the Chancellor states that if this rate were reduced it would in fact increase revenue through more transactions. As a result, the higher rate will be reduced from 28% to 24% in April 2024.

The Capital Gains Tax allowance remains set to be halved on 6 April to £3,000 and has been steadily reducing since April 2023. However, CGT still stands at a much more favourable rate of 10% basic rate and 20% higher rate. Although, could this be a window of opportunity for your clients to take advantage of such low rates as there has been some speculation that rates may rise? The other big advantage is that Capital Gains tax dies with you, yet, there still remains some doubt as to whether this will remain in future.

Working with you whilst we know investment decisions should not be made on  “letting the tax tail wag the dog”, this should form part of the discussions that we have with you and your clients' investment discussions.

Dividend Allowance

The Dividend Allowance remains set to be halved again on 6 April to £500; with no further decreases planned. This is a reduction that was set in motion back in 2017/2018 where we used to enjoy the luxury of a £5,000 allowance. An investment of £15,000 in the FTSE 100, yielding 3.5%, would now breach this threshold, whereas back in 2018 an investment portfolio of £142,000, yielding the same amount, would benefit from tax-free dividends. This is not so bad for basic rate tax payers at 8.75%, yet for a higher rate at 33.75% and an additional rate at 39.35%, it may be worth looking at the suitability of an income strategy that relies on dividends for your clients.

Great British ISA

The Great British ISA will be in addition to the current ISA allowance of £20,000, providing scope for an additional £5,000 investment in UK-listed companies. This increases the maximum contribution into ISAs to £25,000 each tax year, an allowance that hasn’t been increased since 2017.

Investment in the UK is a net positive and will encourage interest in British businesses and financial literacy.  We are fortunate to have a well-educated and entrepreneurial society, which has helped create many high-calibre UK-listed companies. This follows a period of many years of negative sentiment against the UK market which has been particularly impactful for small- and mid-sized businesses, which has discouraged companies listing in the UK.

The British ISA should help support British investment by retail and professional investors and, in doing so, help the economy and employment.

However, for the 802,000 people who maximise their ISA allowances each year, is this just an increase in the overall ISA allowance? This could mean the additional £4.01bn investment into ISAs doesn’t actually invest more in UK companies, but continues to be invested strategically across sectors and geographical locations, holding UK companies in the Great British ISA and fewer UK companies in the “Main ISA”.

Simon Taylor
Simon Taylor, Head of Strategic Partnerships and Platforms

Nearly a quarter have delayed retirement so they can continue to contribute to a pension. This, coupled with the expectation of £353bn of flow into retirement over the next 10 years, showcases that the demand for retirement advice is expected to increase.


Lifetime Allowance

The abolishment of the Lifetime Allowance has brought with it a new hope for many to enable them to continue to save for retirement. It has brought relief to those that would have been faced with a Lifetime Allowance charge, upon taking benefits, as well as those not taking any benefits, but tested against the Lifetime Allowance at age 75. Although the limit to tax-free cash being capped at £268,275, or the limit attributed to any pension protection in place, meant it wasn’t as first thought. However, come April 2024 there will no longer be a Lifetime Allowance, which brings with it opportunity for those that would have been restricted previously. Since the announcement over half of higher rate tax payers have restarted, increased or plan to increase pension contributions2. Nearly a quarter have delayed retirement so they can continue to contribute to a pension. This, coupled with the expectation of £353bn of flow into retirement over the next 10 years, showcases that the demand for retirement advice is expected to increase.

Lifetime Pension

The “Pot for Life” concept, introduced in the Autumn Statement, aimed to simplify pensions for many, is due to go ahead. It gives employees freedom and choice around where their pension benefits are held, something that becomes more focused on the run-up to retirement. However, not all pensions are the same and it is therefore clear clients will need to seek advice in this respect.


The Auto-enrolment Extension Bill received Royal Assent in September, reducing the minimum age to 18. Our research shows it is beneficial for clients to start making pension contributions early. Not only does the regular amount one contributes not have to be as high, clients also have to contribute less overall into a pension. Contributions made in the earlier years have more time to grow and the more growth clients have, the quicker they’ll get to a sizeable retirement pot3.

Non-Dom Status

Non-Dom status is due to be abolished in April 2025. Whilst there will be clear losers from the abolishment of the current ‘non-dom’ regime, the modernisation and simplification of the overly complicated and somewhat archaic rules is welcomed. On the surface the new proposals seem to create a regime that still offers incentives - which are key to attracting individuals to the UK - but will be perceived to be fairer in terms of the time period for which they are offered.

However, with the Non-Dom regime having an impact on all of the major personal taxes -  income tax, capital gains tax and inheritance tax - the detail of the proposals will be key to understanding the full implications and those who have been using the regime will need to take appropriate advice as soon as possible. 

Stamp Duty

The abolishment of the Multiple Dwellings Relief, due to come into effect on 1 June 2024, is aimed at making it easier for locals living in desirable locations for holiday homes, to be able to buy properties in the area they grew up in.

Child Benefit

Child Benefit will move to a household-based system in 2026, which will be good news, especially for families with a single income who can be unfairly penalised. In the interim, the threshold will increase from £50,000 to £60,000 and the taper will increase to £80,000 which will also be welcomed, it has been set at this level since 2013.


The VAT threshold of £85,000 will increase to £90,000 in April 2024. Any increase is a good increase, however, if the threshold had risen with inflation from 2018 it would be £108,048 today and £112,000 by 2025/26.

In summary, a budget to encourage employment, put more money in people’s pockets and encourage more investment into UK businesses.

A view down the side of the British Houses of Parliament

How has the Spring Budget affected markets?

John Wyn-Evans, Head of Investment Strategy at Investec Wealth & Investment (UK) shares his initial thoughts on the Spring Budget announcement.

Spring Budget 2024

8 min read

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  1. Office of National Statistics -
  2. Investec Wealth & Investment commissioned independent research agency Viewsbank to interview 1,070 UK adults aged 18-plus between June 16th and 19th 2023 which included 146 higher rate taxpayers - Read the research
  3. Investec Wealth & Investment, February 2024, How to build a £1 million pension pot - Read the analysis

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