As the country turns its attention towards the general election this week, we thought we would cut through the bluster and share the promises made by the three big political parties regarding your future finances.

Conservatives:

  • The threshold for paying for social care will increase from £23,000 to £100,000. However, under this policy, the individual’s home would also be included in their calculation of assets for home care as well as residential care. Theresa May recently said they would consult on a cap on care costs
  • Higher rate threshold would move up to £50,000 by 2020
  • Increase the personal allowance from its current £11,500 to £12,500 by 2020
  • Winter fuel allowance will be means tested
  • Increase national living wage to 60% of median earnings by 2020
  • Free school lunches will be scrapped for primary school children aged up to 7. This will be replaced with free “breakfast clubs” for all primary school pupils
  • A fixed cap on energy tariffs will be introduced to make it easier to switch energy providers, which would be regularly reviewed by Ofgem
  • Triple-lock on the state pension will be scrapped from 2020. It will be replaced it with a double-lock that sees the payment keep pace with earnings or inflation

Labour:

  • A new 45% income tax rate has been proposed for individuals earning over £80,000, and a 50% tax rate on earnings over £123,000
  • There will be no increase to VAT or National Insurance contributions during the next parliament
  • University fees will be scrapped
  • 30 free hours of childcare will be introduced for parents of three and four-year-olds
  • Maternity pay would be extended to 12 months, while paid paternity leave would increase to four weeks
  • Labour says it would guarantee the triple-lock on the state pension
  • Minimum wage will increase to the level of the living wage by 2020
  • Renters would benefit from three-year tenancies and capped rent rises
  • The married person’s tax allowance, where married couples only can save up to £230 a year if one of them has an income of £11,500 or under, will be scrapped
  • Labour have said that parents paying school fees would have to pay VAT, with the money going to fund free school lunches for all primary school pupils
  • The party also intends to raise money from clamping down on tax avoidance, creating a ‘Tax Transparency and Enforcement Programme’ to close down tax loopholes

Liberal Democrats:

  • Reinstate university maintenance grants for poorer students
  • 15 hours of free childcare to two-year-olds will be introduced
  • The Lib Dems would put 1p on income tax to raise an extra £6billion to spend on hospitals and social care
  • New fathers would receive an extra two weeks paternity leave
  • A higher council tax on second homes will be introduced. This could be potentially as high as 200%
  • Carers would be able to earn £150 a week instead of £110 without losing their Carer’s Allowance
  • The state pension triple lock will remain, meaning it would rise each year even if wages and inflation were stagnant
  • Inheritance tax threshold will be increased
  • A ‘rent to buy’ scheme will be introduced, where rent payments would contribute towards eventually owning a share in the property

 

Ultimately, everything hinges on the outcome on Thursday. We will keep you updated on any important changes, but if you have any questions, please email info@calculis.co.uk or call 01794 525500.

 

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