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18/05

Old Mutual Wealth press comment: Income Tax

If you are covering statistics on income tax published today by HM Revenue and Customs, please see the following commentary from Old Mutual Wealth financial planning expert, Rachael Griffin.

“The data shows that since 1991 more and more people have been pulled into the higher-rate tax band. Around 15% now pay either higher or additional-rate tax, whereas in 1991 less than 7% fell into this bracket.

“As a result, the power of income has waned for those that have stumbled into higher-rate tax. The impact would become even more noticeable were the 50p rate to be re-introduced in the future.

“However, in recent years some tax-free savings allowances have increased, giving savers the opportunity to ensure more of their post-tax income is subsequently placed out of the taxman’s reach. With income-power declining, it is more important than ever for people to make use of these allowances and deploy some of their post-tax earnings as long-term savings.

“While the annual allowance for pension savings has come down, individuals should still ensure they make the most of the available allowance, as income deferred into a pension incurs no income tax. In addition, many employers will share some of the National Insurance savings they make, providing a further top-up to the pension contribution.

“The increase in income tax liability combined with opportunities to shelter savings within a tax-wrapper should encourage people to focus on making their money work harder, rather than simply working harder to make more money.”

 

 

For more information contact

Michael GlenisterOld Mutual Wealth020 7778 963807469 144535michael.glenister@omwealth.com

Notes to Editors:

Old Mutual Wealth

Old Mutual Wealth is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

It has an adviser and customer offering spanning:

  • Financial advice delivered by the Intrinsic network in the UK and AAM Advisory in Singapore
  • Platform based wealth management and protection products delivered by Old Mutual Wealth in the UK & Italy* and Old Mutual International globally
  • Asset management solutions delivered by Old Mutual Global Investors
  • Discretionary investment management delivered by Quilter Cheviot.

Old Mutual Wealth oversees £119 billion in customer investments (as at 30 September 2016).

Old Mutual Wealth is part of Old Mutual plc a FTSE 100 group that provides life assurance, asset management, banking and general insurance. Old Mutual is trusted by more than 19.4 million customers across the world and has a total of £342.7 billion assets under management (as at 30 June 2016).

*Old Mutual Wealth announced the sale of Old Mutual Wealth Italy to Ergo Italia on 9 August 2016. The transaction is pending completion.

This press release is for journalists only and should not be relied upon by financial advisers or customers. Investments may fall or rise in value and investors may not get back what they put in.