In today’s Budget George Obsorne further supported savers by reforming dividends meaning 85% of investors will pay less tax.

George Osborne said of his reforms: “I am today undertaking a major and long overdue reform to simplify the taxation of dividends. The dividend tax credit will be replaced with a new tax-free allowance of £5,000 of dividend income for all taxpayers”

The announcement came among many changes to the tax system that were aimed at reducing tax bills for working people. Corporation tax was also slashed, Osborne said by 2020 corporation tax would be reduced to 18%.

The FTSE 100 rallied on the news and was trading up around 1% in the wake of the announcement, however much of this can be attributed to a rebound from yesterday’s selloff.