How the General Election result could affect your personal finances

Household finances are always a key battleground in any General Election. However, following several years of high inflation, soaring interest rates, and a cost of living crisis, the topic felt even more crucial than usual this time.

Here, Daniel Frampton, Chartered Wealth Manager at Acumen Financial Partnership explores three key areas of your finances that could be impacted by Labour’s victory in the General Election 2024.

Labour election pledges affecting finances

Without further ado, let’s get Daniel’s take on the Labour election pledges that could affect your personal finances:

1. Pensions

“The good news for pension savers and pensioners, in particular, is that Labour has pledged to protect the triple lock. This ensures the State Pension will continue to rise in line with inflation, earnings or 2.5% – whichever is higher.

“Interestingly, despite suggesting that they would reinstate the Lifetime Allowance, which was abolished in April 2024, the incoming Government has seemingly rowed back on that idea for the moment.

“Meanwhile, they’ve also pledged to undertake a thorough review of the pensions landscape. A major part of this will be to look at ways to encourage more pension investment into UK assets,” Daniel adds.

2. Taxes

“Labour has committed to freezing income tax thresholds until 2028 and VAT at 20%. On the topic of VAT, Keir Starmer has also pledged to abolish the current tax exemptions on private school fees.

“Adding VAT to independent school fees could raise £1.5 billion, according to the Institute for Fiscal Studies (IFS). The Prime Minister plans to plough that money into recruiting 6,500 new state school teachers.

“If and when this Labour election pledge comes into effect, there’s no escaping the other potential knock-on effect, which is that it could stretch the budgets of some fee-paying parents to breaking point,” Daniel adds.

3. Savings and Benefits

“Labour hinted at the need to simplify ISAs,” says Daniel. “However, concrete details are thin on the ground. One, ironically quite complex idea, initially mooted by the Conservatives, is the British ISA.

“Proposed in former Chancellor Jeremy Hunt’s Spring Budget, the idea behind this concept is to give investors an extra £5,000 allowance over and above the current £20,000 ISA allowance to invest in UK shares.

“Whether Labour will choose to pursue this idea beyond the consultation stage remains to be seen. Meanwhile, parents and caregivers could be set to benefit from several pledges surrounding nursery and childcare costs.

“Labour has pledged to create an extra 100,000 nursery places by converting 3,000 spare school classrooms into nurseries. They’ve also committed to upholding the Government’s extended childcare funding and introducing free breakfast clubs for primary school children,” Daniel adds.

Acumen is on your side

With the result of the General Election 2024 decided, we can now look forward to some clarity regarding the Labour election pledges we’ve mentioned here and how they might impact your household finances.

With a change of Government and political ideologies comes a changing tide of policies and their knock-on effects. Thankfully, Acumen is here to provide all the financial advice you need to navigate the evolving financial landscape.

Whichever of these Labour election pledges come to light, our financial advisers will be across their implications and can provide advice and guidance to help you manage your personal finances effectively.

“Like most British voters, we’re well-accustomed to adapting to the financial policies of the sitting Government here at Acumen,” says Daniel.

“We look forward to finding out how Labour’s election pledges will be implemented in real terms and helping our clients to better understand how their personal finances might be affected.

“Our experienced team of financial advisers and financial planners is here to support our clients in the North West and beyond to maximise their finances.

“Whether it be pensions, taxes, or investments, we provide unbiased, personalised advisory services and products that are tailored to their needs and presented in Plain English.”

For more information about our financial planning services or to book a consultation, please contact us on 0151 520 4353 or email [email protected].