Family finances: Take action now, or you could lose out

A review of your family's finances may be needed. David Prosser offers a checklist

Not all Budget measures take effect automatically. While you can't escape much of what Gordon Brown announced on Wednesday, there were all sorts of measures that will only affect those who take advantage of them - or who don't take evasive action.


Brown claimed that four in five households would be better off as a result of the tax and National Insurance measures he has proposed for the next three years. But that assumes that families claim the tax credits the Chancellor is offering - and many currently don't.

In particular, four in 10 people entitled to the Working Tax Credit have not claimed the money. Broadly speaking, if you earn less than £15,000 a year you are very likely to be able to claim. If you earn more, check your entitlement (information from

The take-up for Child Tax Credit is much better, at about 90 per cent. It is available to nine out of 10 families. Parents with household incomes of up to £58,000 a year are eligible to claim (£66,000 for families with a child under the age of one).


The Budget small-print confirmed a measure mooted in the Chancellor's Pre-Budget Statement in December. Currently, savers who buy life insurance within a pension - even if they make no other pension contributions - are entitled to tax relief on the premiums at their highest rate of tax. This benefit has now been abolished.

If you've already taken out pension term assurance, as the benefit is technically known, take care. You're entitled to continue claiming the tax relief, but accountants Wilkins Kennedy warn that changing the terms of your policy could jeopardise that. Peter Goodman, head of tax, says: "As soon as they decide to vary their policy by increasing payments or lengthening its term, they will lose the tax breaks for all their payments into the policy."


Savers who pay into a private pension plan other than a guaranteed final salary scheme may need to boost their contributions from next April. The cut in the basic rate of income tax means many people will end up paying less into their retirement savings.

This is because pension contributions attract tax relief at your highest marginal rate of taxation. If you're a basic-rate taxpayer, paying in £100 now costs you just £78, because the Government offers a top-up of 22 per cent, the basic rate. From next year, the basic rate falls to 20 per cent. If you don't make up the difference, your pension will be smaller than expected.


The Chancellor announced good news for thousands of people with holiday homes overseas. People who bought their homes through a company are affected. Until now, homeowners have faced a tax bill on the rental value of their homes, as they are considered to be receiving a benefit-in-kind from their companies.

The Chancellor said no such tax will now be payable. People who have been paying tax - and not all holiday-home owners have declared their properties to the taxman - may be able to claim a refund. Seek advice from your accountant.

Richard Mannion, a tax partner at Smith & Williamson, says holiday-home owners must satisfy four conditions to escape tax: "The company must be owned by individuals; it must exist to own the property; it must not have other assets; and it can't be funded by another company."


The overall annual allowance for investments in tax-free individual savings accounts (ISAs) will rise to £7,200 next year. Within that, you'll be able to save £3,600 in a cash ISA, £600 more than currently. The increases are small, but still worth taking advantage of.

One other Budget wrinkle is that unit trusts investing in property are to get a new tax break. They'll no longer have to pay tax on returns from properties within their portfolios, which should boost the returns available to savers.

More cash for greener homes

* One area where more money is definitely available following the Budget is for people who want grants to help with the cost of installing renewable energy systems - such as solar panels or windmills - in their homes. The Chancellor promised to increase the funding for these grants from £12m to £18m a year.

* However, if you want to apply for this money, which is released in tranches each month, you will need to act quickly. When the most recent funding window opened this month, the grants sold out in just 75 minutes - so even though half as much money again is now available, you'll still need to be quick.

* Full details of how to claim the grants are available from the Energy Saving Trust (0800 512 012; or the Low Carbon Buildings Programme ( April's allocation of money has been cancelled while the organisations work out how to channel the new funding, so the next grants won't be available until May.

* David Rothenberg, of accountants Blick Rothenberg, says Gordon Brown's plan to exempt "carbon-neutral homes" from the first £15,000 of Stamp Duty is pretty useless.

* "To satisfy the requirements the house must generate sufficient renewable energy to run appliances in accordance with a pre-determined scale based on the size of the house," he says. "Whether wind power or solar, the likelihood is that the cost [of installation] will be about £18,000 - the cost will always exceed the Stamp Duty saving."

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    IT Project manager - Web E-commerce

    £65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

    Trainee / Experienced Recruitment Consultants

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

    Trainee Recruitment Consultant - Soho

    £20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Day In a Page

    Secret politics of the weekly shop

    The politics of the weekly shop

    New app reveals political leanings of food companies
    Beam me up, Scottie!

    Beam me up, Scottie!

    Celebrity Trekkies from Alex Salmond to Barack Obama
    Beware Wet Paint: The ICA's latest ambitious exhibition

    Beware Wet Paint

    The ICA's latest ambitious exhibition
    Pink Floyd have produced some of rock's greatest ever album covers

    Pink Floyd have produced some of rock's greatest ever album covers

    Can 'The Endless River' carry on the tradition?
    Sanctuary for the suicidal

    Sanctuary for the suicidal

    One mother's story of how London charity Maytree helped her son with his depression
    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits