Older savers and couples to benefit from new tax reliefs

Low earners will now pay less tax on their savings income as a number of new reliefs, many of which were announced in last year's Budget, have come into effect with the new tax year.

The introduction of a new "zero" rate on the first £5,000 of savings income for individuals earning less than the personal tax-free allowance - which has risen to £10,600 - will benefit retired savers in particular.

The Treasury has estimated that 1.5m people will gain from the measure, which has replaced a 10 per cent tax rate on the first £2,880 above the personal allowance. The reform is expected to cost the exchequer £135m this tax year, rising to £320m in 2016-17.

Millions of low and middle income households can also now apply for a tax break that could reduce their tax liabilities by up to £212 this year.

The so-called marriage allowance will allow more than four million married couples - and those in civil partnerships - to reallocate some of their personal allowance. Only couples where one spouse is a basic rate taxpayer, earning less than £42,385, and the other earns less than £10,600, qualify.

The spouse who does not pay income tax can transfer up to £1,060 of their personal allowance to their higher earning partner, thereby reducing their income tax liabilities.

The government has estimated that elderly couples will account for 35 per cent of those eligible for the relief, which is expected to cost roughly £500m in 2015-16.

Couples where one spouse was born before April 6, 1935, do not qualify, however. They remain eligible instead for the more generous "married couple's allowance", which affords an income tax rebate of up to £835 this year.

For younger couples, there are changes regarding parental leave. Parents of babies born from April 5, and those who have adopted a child since then, can use new shared parental leave rules to allocate their allowance more flexibly.

Under the reforms, up to 50 weeks of maternity leave - 37 weeks of which is paid - can be used by either parent at any time, and does not need to be taken in one go. Both parents can also use the leave at the same time.

The statutory pay is the same as that for maternity and additional paternity leave, the latter of which is replaced by shared leave, at either £139.58 a week or 90 per cent of weekly earnings, whichever is lower.

Many employers offer higher maternity pay, however, which would not necessarily be transferable to a spouse under the new rules.

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