Standard Life announce Scottish Independence currency concerns

The uncertainty of currency in Scotland should they become independent means that some Financial Services companies who underwrite their policies in pounds sterling may have to re-locate south of the border.

Other considerations of an Independent Scotland for Financial Services based there concerns the loss of regulatory protection UK clients currently enjoy; the FCA, FSCS, and FSO for example.

The following Financial Services companies are registered in Scotland.

The Budget 2014

The Main Points

The Budget 2014, the fifth from Chancellor George Osborne, saw him present economic figures issued by the OBR indicating an increase in growth of 0.3% to 2.7% this year, an increase of 0.1% to 2.3% for 2015 and no change at 2.6% for 2016.

Government borrowing is expected to decrease by £1bn to £95bn this year, by £4bn to 75bn for 2015/16, and by 7bn to 44bn for 2016/17.

For savers, the 10% rate will be abolished completely for the first £10,000 saved. For people over 65 years of age seeking to save, a new Pensioner’s Bond will be issued in January 2015 with rates to be set this Autumn. The expected projected interest rates will offer 2.8% for a 1 year bond and 4% for a 3 year bond.

Personal Tax threshold for basic rate tax payers will increase to £10,500 for next year and to £41,865 for higher rate taxpayers.

Investors will be able to invest £15,000 per tax year in a new, simplified merged cash/stocks & shares ISA.

The Chancellor also announced a major change in Pensions. Pensioners will see mandatory annuities abolished and the complete relaxation of income drawdown rules. Defined contribution pensions will be put under a pensioners control enabling them to make decisions based on free access to an impartial advisory service. The latter service has yet to be formulated but will be done so in consultation with the Financial Services Industry. Withdrawals over the 25% tax-free lump sum will be at the individuals marginal income tax rate and the 55% rate will be abolished.

The Business Rate scheme will be extended for a further 3 years, a £7bn manufacturer’s energy package and a promise of £3bn lending for exporters.

Infrastructure will receive an additional £140m for flood defences and £200m for pot hole repair.

Stirling House Comment

People are now in a better position than ever to invest in a Pension Fund. It remains the most tax efficient method of building up a Retirement Pot and a 25% tax free lump sum. What has changed is that the other 75%, if accessed under “drawdown rules”, attracted a 55% tax charge or had to be used to buy an income for life (an annuity). Now this 75% may be accessed anytime subject to the individuals normal tax rate (usually 20%) and the compulsory purchase of an annuity is being abolished in favour of being voluntary.