Key personal finance areas and policies to look out for before the General Election

The next General Election is quickly coming up on 4 July 2024, but what does this mean for your money?

We look at the key focus areas and proposals by the Conservatives and Labour Party.

Income tax and national insurance

The UK government has already cut national insurance twice and intends to abolish it completely; however, this could take decades to achieve.

In the Conservative's manifesto, it pledged to reduce the amount of employee national insurance in the future. 

The Labour Party says it doesn’t plan to increase income tax or national insurance, while both parties intend to keep the income tax threshold frozen. 

Triple lock and pensions

The Conservatives have pledged to keep the triple lock, where the UK state pension rises in line with the highest out of inflation, average earnings, or 2.5%, and increase the personal allowance for pensioners.

The personal allowance is currently £12,570 a year, which the Conservatives froze until 2027-28. The state pension is currently around £11,500 a year.

By freezing the personal allowance, the government introduced a stealth tax.

More people can exceed this allowance when their income rises to beat inflation, which has been higher than the 2% target for several years. In May 2024, UK inflation hit the 2% target. 

So, by increasing the personal allowance for pensioners, they can pay less tax.

The Labour Party has confirmed it intends to keep the triple lock.

Labour also says it will review the pensions landscape to consider how to improve outcomes and boost investment in the UK, as well as use reform so workplace pensions can deliver better returns. 

There has been little on the auto-enrolment scheme in both Labour and Conservative manifestos.

State pension age increases

Planned state pension age increases are likely to come into focus during this General Election.

The state pension age is currently 66, although this is set to rise to 67 by 2028 and 68 by 2046.

However, the International Longevity Centre UK believes the state pension age will need to rise to 71 by 2050, and there have been calls to increase the state pension age more quickly to save money.

Childcare and education

In 2023, the government said it would expand free childcare to all children under five, which the Labour Party will support if it wins the election.

The Conservatives have also promised to make more families eligible for child benefit payments.

Labour wants to expand childcare by repurposing unused school classrooms into nurseries to improve availability, as well as provide free breakfast clubs.

It is also planning to introduce 20% VAT on private schools.

Housing 

The Labour Party plans to build 1.5 million homes in five years and increase access to affordable housing.

It also plans to launch a new mortgage guarantee scheme to help people buy a property with a 5% deposit and wants to ban 'no-fault' evictions.  

The Conservatives want to introduce a new Help to Buy scheme and permanently abolish stamp duty for first-time buyers of properties worth up to £425,000.

They also want to build 1.6 million homes over five years and continue the mortgage guarantee scheme, as well as ban 'no-fault' evictions, which they first proposed in 2019.

Need financial advice?

With an upcoming election, many personal finance issues will be thrust into the spotlight, which can encourage more people to examine their finances and plan for a brighter future - regardless of who wins.

If you’re looking for help with your finances, whether it’s your pension, mortgage or investments, expert advice can help.

Unbiased can quickly connect you with a financial adviser, accountant or broker specialising in mortgages or insurance.