The Labour Party has secured a historic majority win in this year’s General Election but what does that mean for your finances?
Taxes, pensions and savings have been discussed during the election campaign but Prime Minister-elect Sir Keir Starmer and Shadow Chancellor Rachel Reeves have been urged to be more specific when it comes to their fiscal agenda.
As Labour prepare to get the keys to Number 10, we spoke to Jordan Gillies, a partner at wealth management firm Saltus, to see what the pending Government will mean for your money over the next five years.
Speaking exclusively to GB News, he shared: “The reality is that from a personal finance perspective, all the manifestos had much potential for excitement as a lukewarm cup of decaf coffee.
“The IFS’s director, Paul Johnson, has summed it up, saying ‘their proposals on tax, benefits and public service spending would be barely enough to detain us in analysing a modest one-year fiscal event’. They certainly don’t answer the big questions facing us over a five-year parliament.”
Here is a breakdown of where the Labour Party currently stands on major topics, including the state pension and inheritance tax (IHT).
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Britons want specifics when it comes to Sir Keir Starmer’s fiscal plan
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Pension planning
On pensions, Gillies said: “The silence in Labour’s manifesto around pensions is probably the most interesting element about it.
“Apart from pledging to protect the triple lock in its current form and review the ‘pension landscape’, there has been caution in the wording so as not to commit to anything significant at this stage; they don’t even mention the Waspi women, which is pretty uncontentious.”
Under the triple lock, state pensions are guaranteed to rise every year by either the rate of inflation, average earnings or 2.5 per cent; whichever is higher.
In their manifesto, Labour promised to “protect the triple lock on pensions and increase the state pension each year in line with inflation, average earnings, or by 2.5 per cent, whichever is higher”.
Following a report by the Parliament and Health Service Ombudsman (PHSO), women impacted by historic changes to the state pension were found to be potentially liable for thousands of pounds in compensation.
However, Labour has yet to put forward a proposal to meet the demands of those in the Women Against State Pension Inequality (Waspi) campaign.
The Saltus partner also discussed the Lifetime Allowance – which is the total amount people can save in their pot without paying tax.
He added: “Not long ago, we were expecting a clear statement in the manifesto promising to re-introduce it at a particular level.
“But Rachel Reeves has since confirmed that they will not bring it back if they win the election, possibly on the realisation of the practical and legislative challenges it would present – most probably why the Conservatives chose to abolish it rather than simply raise it.”
Taxes
During the election campaign, Reform was the only political party to call for drastic reform to inheritance tax (IHT), which is known as the “most hated” levy in Britain.
When it comes to capital gains tax (CGT), Gillies pointed out Labour plans to end a “tax loophole where performance-related pay in the private equity industry is considered a capital gain”.
However, the party has promised to “end a tax loophole where performance-related pay in the private equity industry is considered a capital gain”.
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Many households have struggled to make ends meet do the hiked tax burden
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During the campaign, Labour asserted that it would not raise corporation tax in a boon for big business.
“This will be welcome news to high net worth individuals. When Saltus asked 2,000 people with assets of over £250,000 which tax they felt was ‘the most unfair’, corporation tax topped the list,” Gillies said.
As well as this, Sir Keir has also made bold commitments to not raise income tax, National Insurance or VAT on households.
Britons currently face paying more in income tax due to the Conservative Government’s six-year freeze to income tax thresholds, set to end in 2028.
