“While salary sacrifice to maximise pension contributions will remain very tax efficient, the changes in national insurance may reduce the amount going into pensions.”
New British Isa
Hunt has also pledged to reform the Isa system to encourage more people to invest in UK businesses.
The government will launch a British Isa offering an extra £5,000 tax-free allowance to invest exclusively in the UK.
Hunt said: “This will be on top of existing Isas and will ensure UK savers can benefit from the most promising UK businesses as well as supporting those businesses with the capital to expand.”
Rachael Griffin, tax and financial planning expert at Quilter, has concerns the British Isa could complicate things for savers.
She says: "The Isa is a simple idea, a tax-efficient place to grow your wealth, however with various additions over the years it has now become a confusing area of personal finance. Faced with the complexities of this consumers tend to just opt for what they know and that almost always is just a cash Isa."
She also says few people actually use all of their Isa allowance in a given tax year so the allure of £5,000 more is only appealing to much higher-net-worth people.
"The reality is we need to better incentivise the millions languishing in cash Isa accounts to be put to work in the stock market."
But Susannah Streeter, head of money and markets at Hargreaves Lansdown, says retail investors have a role to play in improving liquidity in London markets, "especially at the small and mid-cap end".
"Hargreaves Lansdown's clients are already enthusiastic UK investors, with 83 per cent of shares held in UK listings. With more than 1,000 UK equities available on our platform, there is plenty of choice," she adds.
Sam Dewes, tax partner at HW Fisher, adds: "Under current thresholds, any benefits of a 2 per cent national insurance cut will be capped at £754 per year for workers above £50,270 unless adjustments are made to the upper national insurance rate.
"However, while some workers may experience reduced national insurance contributions, the broader tax framework is poised to continue exerting significant pressure on taxpayers, and many will end up paying an increased tax rate overall by being pushed into higher tax brackets."
Property CGT cut
The chancellor cut capital gains tax for higher or additional rate taxpayers selling a residential property from 28 per cent to 24 per cent.
Hunt said both the Treasury and the OBR had looked at the costs associated with the levels of CGT on property.
"They have concluded that if we reduced the higher 28 per cent rate that exists for residential property, we would increase revenues because there would be more transactions."
Kate Davies, executive director of the Intermediary Mortgage Lenders Association, calls the policy "little more than a sop to those landlords forced to exit the private rental sector by tough economic conditions and a punitive taxation system".
