The Small Print

Last week, we asked whether gold had drawn its line in the sand at $4,100. It hadn't. Gold slipped to $3,975, its lowest level since July, before steadying nearer $4,000. It looks to be on the rise again as this week, the attention turned closer to home.

Yesterday, John Healey delivered his first Budget as Chancellor. He billed it as a Budget for “working people”, with no rise in income tax, National Insurance or VAT. He also cut the buffer against his own borrowing rules to £15 billion, and it remains to be seen how bond markets will react.

The headlines were about energy bills and the cost of living. For anyone who saves, invests or owns property, the more interesting changes were in the small print. Here are five worth knowing about.


Interest, with interest

From April 2027, interest earned outside an ISA will also be taxed at 24% for basic-rate taxpayers, up from 20% today. The tax-free personal savings allowance doesn’t change: basic-rate taxpayers can still earn £1,000 of interest a year before any tax is due, and higher-rate taxpayers £500. So those with modest savings may not notice. Those with more will.

It also makes the Cash ISA U-turn look all the more welcome. Interest earned inside an ISA remains tax-free, however high the rates on the outside climb.

Worth noting that with gold, there’s no interest to tax.

Landlords pay a little more

Landlords are in the same boat as savers. From April 2027, rental income will have its own income tax rates, set four percentage points above the rates on earnings. A basic-rate taxpayer will pay 24% on rent, against 20% on wages. Last year’s Budget had already set the gap at two points. This one doubles it.

Property has long been the British saver’s favourite home for spare cash. It is now being asked to carry a little more of the load.

The banks chip in

The extra tax banks pay on their profits, on top of normal corporation tax, doubles from 3% to 6% from January. It’s temporary, running for 15 months, and helps pay for support with energy bills.

Banks will hope “temporary” means exactly that. In the meantime, costs like this have a habit of finding their way back to customers, whether through slightly lower savings rates, slightly dearer loans or a new fee here and there. For savers, the rate on offer is worth watching.

Cash ISAs: as you were

The plan to cut the Cash ISA allowance to £12,000 for under-65s from April 2027 has been dropped. Everyone over 18 keeps the full £20,000. The Chancellor also promised to work with the industry on a reward for first-time stocks and shares ISA investors, though the details are still to come.

Cash has its place, and keeping the full allowance is welcome news. But a tax-free wrapper protects the interest, not what the money will buy. Which is why some savers like to keep part of their wealth in something they can hold.

A leg up the ladder

From next spring, a new “Your First Home” scheme will lend buyers up to 20% of a new home’s price, interest-free for five years, backed by £4.7 billion of government lending. Brokers have been quick to point out how closely it resembles Help to Buy.

The, often critised, Lifetime ISA is also on its way out. From 2029, a new First Time Buyer ISA will replace it for savers. It remains to be seen if this will be a sound place for those wanting to join the ladder. In the meantime, the penalty for using a Lifetime ISA on a home above the price cap has been cut, so savers will get back at least what they put in.

What didn’t change

Just as telling was what the Budget left alone. Capital gains tax stayed put, despite plenty of speculation beforehand. So did dividend tax and the inheritance tax thresholds. Unused pensions will still come into inheritance tax from April 2027, as planned.

Nothing changes for gold either. Investment gold still carries no VAT, and gold coins that are UK legal tender, such as Britannias and Sovereigns, remain free of capital gains tax.

The rest, at a glance

A few other changes didn’t make our five, but are still worth knowing about. Around 20 million households in council tax bands A to D in England will get £100 off their energy bills from January, VAT stays off household electricity until July 2027, and Ofgem has been asked to scrap the gas standing charge by the end of 2027. From April 2027, pensioners whose total income is no more than the full new state pension won’t pay income tax, and the triple lock stays until April 2029. Income tax and National Insurance thresholds remain frozen until 2030/31, the National Living Wage rises 3.9% to £13.21 an hour, and the 5p cut in fuel duty runs on to July 2027. Homes in England worth £2 million or more face a new council tax surcharge from April 2028, while business owners get a new 10% Founders’ Relief alongside a halved Business Asset Disposal Relief limit of £500,000.

And finally, Washington

That evening, the Federal Reserve left US interest rates unchanged, as expected, though not unanimously. Two of its twelve voters wanted a rise straight away. With the Fed describing inflation as still elevated, and Chair Kevin Warsh giving little away, a rise in December remains possible. Markets are leaning that way, but nothing has been decided.

Today brings the Fed's preferred measure of US inflation. Next week, it's the US midterm elections on Tuesday and the Bank of England's decision on Thursday.

Westminster changed what savers keep. Washington may decide what gold does next.