Budget 2018: light at the end of the tunnel?
The Chancellor’s autumn budget statement hasn’t moved the earth for reward professionals and employee benefits providers. There was some cheerful news for employees though, offering a bit of light at the end of the austerity tunnel.
A number of tax, pensions and savings measures should lift the spirits of workers – and of employers concerned about their employees’ financial wellbeing.
Tax and savings changes
From next April (a year earlier than planned):
- the personal tax-free allowance is increasing by £650 to £12,500
- the higher rate tax threshold is rising from just over £46,000 to £50,000.
More good news for families is that the Junior ISA allowance will increase to £4,368.
The adult ISA allowance stays at £20,000, already a healthy limit which encourages employees to save in a tax-efficient way.
Tax relief on pension contributions remains unscathed, despite dire warnings to the contrary. The Lifetime Allowance (the maximum amount individuals can pay into their pension without being taxed) is increasing to £1,055,000.
All the more reason to keep employees focused on saving for the future.
Employees on or approaching the property ladder can enjoy some financial relief too. Stamp duty is being abolished for more first-time buyers and the capital gains tax allowance is increasing to £12,000.
Mental health and wellbeing
The rising tide of interest in mental health and workplace wellbeing is reflected in public spending. Funding for mental health services will grow as a share of the overall NHS budget over the next five years.
This is a welcome commitment from the Government, suggesting that mental health is gradually approaching parity of esteem with physical health. The services provided with the extra funding should help people to return to and stay in work.
Mental Health First Aid training continues to grow in popularity among businesses, as employers realise the importance of creating a culture where employees feel supported.
SMEs investing in apprenticeships will only need to contribute five per cent to the training, instead of the current 10 per cent. Although it isn’t clear when this change will come into effect, the news is still positive for smaller businesses committed to apprenticeship programmes.
Green and ethical interests
Members of our green and ethical benefits group will be interested to know about the Woodland Carbon Guarantee scheme. This will support the planting of around 10 million trees, helping offset carbon emissions and support wildlife.
We’ve yet to work out how this could translate into an employee benefit, but the good news is that the Government is showing a commitment to sustaining woodland.
Child care vouchers
RIP the child care voucher scheme. We knew it was coming to an end in October, but at least there was a stay of execution for six months. At PES, we will continue to provide child care vouchers for employees already enrolled on the scheme.
Delivering a great employee experience is a challenge for growing organisations. At PES, it’s what we do. Our online employee benefits platform, HR support and workplace wellbeing services bring out the best in your employees – enabling your business to thrive.