Shutterstock / Deacons docs
As the general election appears on the horizon, the actions taken by the new government will have an impact on not just the economy and the health of public services, but also repercussions for your personal finances.
Now the parties have published their manifestos, we’ve gone through each to find out where they stand on key issues that could affect your financial wellbeing, and help you understand the main pledges that each party is making.
One of the Conservative Party’s headline proposals is the ‘Triple Lock Plus’, which would kick in from April 2025 if the party is elected.
In addition to pledging to maintain the Triple Lock (which guarantees that the State Pension will rise in line with the greater of 2.5%, earnings growth or inflation), it will also increase the personal allowance for its recipients by the same amount, to ensure they never have to pay income tax on the State Pension.
The party has also said that it will maintain the 25% tax-free cash allowance as part of its new ‘Pensions Tax Guarantee’, as well as keeping tax relief on pension contributions as it currently stands.
In response to the Pensions Ombudsman finding earlier this year, which said the government failed to properly communicate changes to the State Pension age to WASPI Women and should pay compensation as a result, the manifesto said it was ‘carefully considering the Ombudsman report’ and that it would work with Parliament to provide an ‘appropriate and swift’ response.
Labour has said it will protect the Triple Lock in its current form. Additionally, it has pledged to review the current state of pensions and retirement savings in the UK, and will also review whether the current system will deliver ‘sustainable retirement incomes’.
It also pledged to improve returns for retirement savers through ‘workplace pension system reforms’ but didn’t give any more detail beyond saying it wants to ‘improve security’ in retirement.
In the Liberal Democrats’ election manifesto, the party committed to maintain the Triple Lock and also said it would look to help those that are yet to retire by tackling the gender pension gap and invest in State Pension helplines.
The aim of this is to help provide faster responses to those with queries or who are looking to resolve issues around underpayment.
The Liberal Democrats also want to improve the processing system for people who are topping up their State Pension with voluntary National Insurance contributions, including the issuing of proper paper receipts.
The manifesto also stated that the party would ‘ensure that women born in the 1950s are treated fairly and properly compensated’.
The Green Party has said it will ensure pensions are uprated in line with inflation and wage rises ‘across the economy’ – a double, rather than triple, lock for pensions.
It would also limit the rate of tax relief on pension contributions to the basic rate of 20%, for all taxpayers.
It also wants to remove fossil fuel assets from investment portfolios (including pension funds) by 2030.
The Reform UK party’s manifesto, dubbed ‘Our Contract with You’, doesn’t mention the Triple Lock.
Like other parties, Reform has also committed to a pension review if elected, focused on the cost and returns of the current system. The pledges also mentioned looking to other countries’ way of doing pensions and savings, such as Australia.
The SNP is giving its support to the Triple Lock and has stated it wants full compensation to the WASPI Women affected by changes to the State Pension age.
It also wants a wellbeing pension – intended to reduce poverty amongst older Scots – and would campaign against further increases to the State Pension age.
It would also reverse rules that prevent mixed-age couples claiming Pension Credit.
The Party for Wales will support the Triple Lock and wants to increase the personal allowance in line with the State Pension, to stop recipients having to pay income tax.
It will also back compensation for WASPI Women to at least Level 5 of the ombudsman scale for all women affected.
For those who are still in work (and below State Pension age), the Conservative Party has pledged a further 2p cut to National Insurance (NI), taking it down to 6% for employees.
It also pledged to support self-employed workers by scrapping the main rate of NI within the next five years, as well as pledging that the rate of VAT itself will not be raised. Council tax bands will not be re-evaluated or increased.
The Conservatives have proposed offering a temporary two-year Capital Gains Tax (CGT) relief to landlords if they sell their property to existing tenants and pledged to not raise CGT if elected, and to maintain the current rules that see no CGT paid if you sell your main (primary) home.
The Labour Party has pledged not to increase taxes on ‘working people’ – specifically stressing that it won’t increase the current rates on income tax, NI or VAT.
One of Labour’s most widely-reported tax proposals is its decision to remove the VAT break for private schools, meaning families could see school fees rise by 20%.
Inheritance tax (IHT) would get a small change, with a pledge to remove the ability to use offshore trusts to avoid the tax.
Tax cuts are central to the Liberal Democrats’ manifesto – but, the party says, they would only commence once public finances allow.
Plans include an increase to the personal allowance – meaning everyone could earn more, or receive higher income from pensions, before they need to pay tax.
The party has also said it would like to take more lower-paid people out of income tax altogether, but hasn’t provided specifics on either of these options.
The Liberal Democrats also have made pledges around CGT, aligning it to income tax rates. This will create three tiers of 20% (for gains up to £50,000), 40% (between £50,000 and £100,000) and 45% (over £100,000).
The party has pledged to increase the CGT annual allowance – the gains you can enjoy before you need to pay the tax – from £3,000 to £5,000. There would also be an ‘inflation allowance,’ meaning that any gains that could be attributed to inflation would not be taxed.
The Green Party’s tax proposals have a strong focus on increasing taxes for the wealthiest.
This would include a new wealth tax for individuals with assets worth more than £10 million, at 1% on the assets for people with more than £10m, and 2% for those with over £1bn – but not increasing the basic rate of income tax.
The Green Party would align CGT rates with income tax, but also apply the changes to tax in investment income too. This would change depending on the level of income.
It will also scrap the Upper Earnings Limit on National Insurance for high earners and re-evaluate Council Tax bands.
VAT for private schools' fees would be added, although places for children with special education needs will be exempt. VAT would also be removed on ‘cultural events’, like museum and theatre visits.
The Green Party has also pledged a ‘reform’ on IHT, saying its plans will make the transfer of wealth fairer, but hasn’t given further detail on what this will entail.
Reform has made a number of new tax proposals. These include lifting the point at which people start paying income tax to £20,000 a year and increasing the threshold for higher-rate tax to £70,000.
It also wants to introduce – ‘as soon as finances allow’ – a 25% transferable marriage tax allowance, meaning no tax on the first £25,000 of income for either spouse.
It would also scrap VAT on energy bills, private healthcare or insurance, and reduce duty on fuel - but pledged to keep VAT relief for private schools.
IHT would be overhauled too. This would include scrapping IHT for all estates over £2m and reducing the rate of tax from 40% to 20%.
Although the Scottish government has some control over income tax, tax policy in Scotland is controlled in Westminster.
As such the SNP is campaigning for full devolution of tax and NI.
With full control over VAT, it says that it would remove the VAT exemption for private schools. It would also support the reform of VAT to change levels currently set on various categories, such as a lower rate of VAT for the hospitality and tourism sectors.
The Welsh Party wants the Senedd to have powers to set income tax bands in Wales and would give backing to a new wealth tax, as well as ‘investigate’ increasing higher earner’s NI contributions.
It also wants to align CGT rates with income tax, as well as also charging VAT on private school fees.
The Conservative Party manifesto states it would introduce its previously announced social care proposals as part of its ‘People at the Heart of Care’ White Paper.
These include capping care costs at £86,000 and increasing the means-tested threshold for state support from £23,250 (for England and Northern Ireland) to £100,000.
Labour confirmed its plan for a new National Care Service in its manifesto, with national standards aiming to give the same service to everyone, wherever they live.
It has pledged ‘home first’ care, which it says will help people to live independently for as long as they can.
One of the core proposals of the Liberal Democrats’ election campaign is the provision of free personal care, similar to what’s been available in Scotland since 2002.
Personal care covers things like washing, getting dressed, eating and food preparation as well as taking medication.
The Liberal Democrats also pledged to create a cross-party commission to develop sustainable approaches to funding social care over the long-term.
Unpaid carers would get more support too, including raising the earnings threshold for Carer’s Allowance (with a tapering down of payments after exceeding it) and reducing the amount of hours needed to qualify.
The party has also pledged to end any pursuit of overpayments of Carer's Allowance, as well as support paid carer’s leave and a guarantee of regular respite breaks.
The Green Party wants to extend free personal care beyond Scotland as part of an investment in social care, as well as increasing the Carer’s Allowance by 10% per month.
The Green Party has also pledged better support for local authorities to help with funding residential care and means-testing other costs outside of personal care for those living in care homes.
Reform says it will open a Royal Commission of Inquiry into social care during its first 100 days in Parliament.
The idea would be to agree a national plan for care with more flexibility, tax breaks and less waste.
As part of this, Reform wants a single funding stream for care, rather than splitting it between the NHS and local authorities (as is the position now).
The SNP has pledged, as part of its reforms on welfare, that it will halt the Department of Work and Pensions demands for repayment of Carer’s Allowance.
Plaid Cymru wants social care – like the NHS – to be free at the point of use. It also wants to see a new National Care Service and to reduce the amount of time in hospital – particularly for those with dementia – and place them in care settings instead.
The party also says it will consider paid leave provisions for those caring for others with long-term needs.
There’s billions sitting unclaimed in shares and dividends – find out if any belongs to you.
From their first savings account to their first home, find out how your gifts can make the biggest impact for your grandchildren
.jpg?la=en&h=354&w=616&hash=653168623B92F3457D40ACA115D37B3E)
.jpg?la=en&h=354&w=616&hash=458B0288E9852F4B63A433E2FDD375E7)
We're here to help you make the most with your money. With a rage of financial services designed with over 50s in mind.
