It appears that the country is not as divided as once thought; after a landslide win in last night’s general election result, the Conservatives have a majority of 79.
But what does this actually mean for your finances?
Looking at some of the promises made in the run up to the General Election 2019, we can see what plans the Tories have for the UK following the general election result.
Prime Minister Boris Johnson has promised to “get Brexit done”.
With the Tories in power and Boris at the forefront, the UK could be leaving the EU by 21st January 2020. All that is needed now is final sign off of the Brexit deal already brokered with the EU. This will be expected soon, probably before Christmas.
Conservatives promised to fix the issue with pension tax relief, meaning workers earning between £10,000 – £12,500, the majority of which are women, may be losing out on £8,000 in pension savings during their working career.
Also, although not promising to scrap the taper altogether, they stated they would fix the effect the tapered annual allowance is having on doctor’s pensions. They promised to solve the “taper problem” within 30 days of winning the election, so action should be taken imminently.
The Conservative party have also promised to keep the triple lock on the State Pension, meaning it will rise by a minimum of 2.5% per year. The winter fuel payment and the older person’s bus pass will also remain, along with other pensioner benefits.
Tax and National Insurance
In a likely attempt to avoid any pre-election controversy, the Conservative manifesto did not suggest any increases to income tax, national insurance and VAT. These should remain the same under their triple pledge on tax.
However, the Conservatives did want to raise the national insurance threshold by £868 to £9,500 per year, with the intention of increasing it to £12,500 in the future. Although no promises were made to improve income tax for the lowest earners, an initial extra £104 saving in national insurance payments will be a welcome benefit. With plans to increase this saving to £444 once the NI threshold is increased in line with the personal tax allowance currently a £12,500.
The Conservative manifesto stated that “nobody needing care should be forced to sell their home to pay for it”, however it was not backed with any further detail on how the party would address the funding of this pledge.
They aim to build a cross-party consensus; however previous attempts have been dropped.
In the meantime, an extra £1 billion of funding each year will be earmarked for more social care staff, better technology, infrastructure and facilities.
Conservatives intend to create a new market of long-term, fixed rate mortgages for first-time buyers. Speculation on whether there will be an appetite for this has been expressed by experts within the mortgage market.
Although not a new policy, the promise to build 300,000 homes a year by mid-2020 is still a target for the Government.
Following Brexit, the Conservatives intend to make the UK the ‘best place to start and grow a business’.
A tax cut for 500,000 small businesses by increasing the Employment Allowance, as well as plans to expand start-up loans, will hopefully increase the number of entrepreneurs starting new ventures.
However, whilst encouraging new start-ups, the party has proposed a review of entrepreneur’s relief. Entrepreneur’s relief reduces the capital gains tax when you sell your business, which can be incredibly valuable for business owners, especially when it comes to planning for their retirement.
What happens next?
So after the landslide general election result, what does the Government has planned? Boris Johnson promised Brexit and the Budget within the first 100 days of being elected, so we anticipate that these will take top priority now the Conservatives continue their term.
As the news unfolds, we will highlight any areas we think are of particular importance to your finances, however in the meantime if you have any questions about any aspect of this article or your finances, please do get in touch and speak to one of our financial planners.