Personal Tax-free Allowance & Higher Rate TaxThe personal allowance – how much you earn before you need to start paying income tax – will increase by £650 in April 2019, to £12,500.
Higher-rate income tax threshold to rise to £50k
The earnings threshold at which you’d need to pay the higher rate of tax (currently 40%) is going up to £50,000, from £46,351.
Both changes come into effect from 6 April 2019, a year earlier than planned. The Treasury estimates that around 32 million people will benefit as a result.
Lifetime AllowanceAs announced earlier, the Lifetime Allowance is due to rise by 2.4 per cent to £1,055,000 in 2019 in line with September’s consumer price index (CPI) inflation figure, which is good news for pension savers. The Lifetime Allowance is the maximum you normally can save over the lifetime of your pension pot without paying extra tax.
There were no changes to pensions tax relief rates and allowances, which is good news for those saving into a pension.