Election 2024 – what each manifesto means for your money and how to protect your finances ahead of July 4

THIS week has seen each major political party reveal its manifesto promises ahead of the general election on July 4.

As the battle for the keys to Number 10 heats up, the parties are looking to secure as much support as possible by enticing voters with pledges to put extra cash in their pockets.

But it can be difficult to know what each of the policies means for your money in reality.

Here, we unpick each of the party’s manifesto pledges and explain what they would mean for you.

TAXES FOR WORKERS

With the election coming during a cost of living crisis, all of the parties are keen to avoid being seen to be putting up taxes – but some are doing more than others to help workers.

The Tories

• 2p NI cut
• Scrap self-employed NI
• Increase child benefit threshold to £120k

The Conservative Party pledged a series of tax cuts in its manifesto, including yet another 2p National Insurance (NI) cut by 2027, which would be its third to-date.

This would save someone earning £25,000 a year £248.60 annually.

It also promised to completely scrap NI for self-employed workers during its term, which would save someone on the same salary £994.40 a year.

Jason Hollands, managing director at financial firm Evelyn Partners, said: “The abolition of NI for the self-employed would be a welcome incentive for setting up on your own, as opposed to going into employment.

“Together with the 4p already cut from NI this year, another 2p off would add up to a quite significant tax cut, which is put at £1,300 a year for the average worker by the Conservatives.”

However, while the tax cut will save workers’ money compared to not cutting the NI rate, the amount workers pay in tax will continue to rise.

This is because the Government has kept tax thresholds frozen since April 2021, and will continue to do so until April 2028, resulting in millions of Brits being dragged into higher tax bands.

Tom Selby, director of public policy at AJ Bell, explained: “The freeze on income tax thresholds will see millions dragged into higher rates of taxation.

“The Office for Budget Responsibility estimates that by 2028-29 the deep freeze will see almost four million extra taxpayers, with 2.7 million more moved to the higher rate of income tax”.

Another major pledge from the Tories is to increase the child benefit threshold to £120,000, tapered up to £160,000 of earnings.

This is a huge increase on the existing level of £60,000 and would benefit 700,000 families, the Conservatives claimed.

Labour

• No tax rises for five years
• Set to freeze fuel duty

The Labour Party did not match the Tories’ pledge to cut NI by another 2p, but it did commit to not raise taxes for five years – the length of an entire term in parliament.

However, the party also did not commit to ending the existing freeze on tax thresholds any earlier than April 2028, which would mean workers are still paying more tax.

Sarah Coles, head of personal finance at broker Hargreaves Lansdown, said: “Labour has pledged that there will be no tax rises for working people. They have specifically ruled out rises to income tax, National Insurance and VAT.

“However, both Labour and the Conservatives have said they won’t tackle the misery of frozen tax thresholds. It means whoever is elected, you’re set to pay more tax.”

Plus, The Sun revealed today Sir Keir Starmer looks set to freeze fuel duty – also known as petrol tax – if it wins government, having previously refused to rule out a hike.

The Lib Dems

• Increase wealth taxes to fund services, including on CGT

The Lib Dems did not make any specific proposals around income tax or NI.

However, they did pledge to hugely increase Capital Gains Tax (CGT) to raise additional tax revenue.

CGT is the amount you pay in tax on any profit you make when you sell something. It is widely seen as a tax on the wealthy, with less than 3% of adults paying it.

Reform

• Raise the personal tax allowance to £20,000

While Reform has not released its full manifesto, it has published a draft in which it has pledged to bring the UK’s tax burden on workers down.

Its key promise to do this is through a huge increase to the personal allowance from the current £12,571 to £20,000.

It claimed this would save the average worker £1,500 a year in tax.

PENSION PLEDGES

Both Labour and the Conservatives promised to keep the pensions triple lock in place, which would come as a relief to pensioners worried about the cost of living.

The Tories

• Triple lock confirmed, with triple lock plus guarantee

The Conservative Party went further by pledging to increase the personal allowance – the amount you can earn without paying tax – for pensioners in line with the state pension, to avoid them paying tax on their state pensions in future.

The OBR predicts the state pension will overtake the personal allowance by 2027, meaning those relying on it for their income would start being taxed.

However, this is only predicted to happen because of the continued freeze on tax thresholds.

Given the Tories are pledging to cut NI, too, experts expressed concern their state pension pledges are unsustainable long-term.

Tom McPhail, director of public affairs at the lang cat, said: “On the one hand they’re cutting NI which funds state pensions, but on the other, making promises to retain the triple lock. 

“As a matter of urgency, we need to have a sensible conversation about what a sustainable, adequate and fair pension system looks like.”

Labour

• Triple lock confirmed
• Review of workplace pensions

The Labour party did not match the Conservatives’ manifesto pledge to increase the personal allowance for pensioners in line with the state pension.

This would be bad news for pensioners worrying about the prospect of paying tax on their state pension in the near future.

However, experts say this will go down well with voters who are already concerned about the high cost of the triple lock.

Helen Morrissey, head of retirement analysis, Hargreaves Lansdown, said: “The decision not to try and trump the Conservatives on this will go down well with those who criticised the triple lock plus for favouring pensioners at the expense of working age people.”

In a surprise announcement which comes as good news for workers, Labour did commit to reviewing workplace pensions with the aim of increasing people’s pension savings.

It said: “We will undertake a review of the pensions landscape to consider what further steps are needed to improve pension outcomes and increase investment in UK markets.”

The manifesto was scant on further detail about what the review will entail.

But David Lane, chief executive of TPT Retirement Solutions, said: “Labour’s plan to review workplace pensions will be welcomed by voters and the pension industry.

“Our research found nearly nine in ten (88%) working people want the next government to do more to help people save for retirement, as 57% are worried they are not saving enough in their pension.”

Lib Dems

• Triple lock confirmed
• Review of pensions for gig economy workers and carers

The Liberal Democrats also promised to keep the pension triple lock in place.

The party also had some more radical plans for ensuring more workers get the pensions they deserve.

It pledged to review the rules to ensure people working in the “gig economy”, as well as carers, don’t lose out on proper retirement funds.

The party also broke ranks by pledging to ensure WASPI women – women born in the 1950s who lost out when the state pension age increased – are properly compensated for their losses.

Reform

• Adopt an Australian-style pension system

Reform said it wants to reform pensions to adopt a more Australian-style regime, where money is collectively invested, although it didn’t offer much more detail on how this would work.

BENEFIT BLOWS

One area where the main parties diverged was on changes to benefits.

The Tories

• Reform welfare system to get more benefits claimants into work

The incumbent government focused its benefits plans on reforming the welfare system to help more working-age Brits on benefits get a job.

Rishi Sunak said the reforms – which he has branded a “moral mission” – will cut down on £12 billion a year of waste by the end of the next parliament.

“We will pay for permanent reductions in taxation by controlling the unsustainable rise in working-age welfare,” he said.

Labour

• Reform welfare to tackle poverty and get more into work
• Review of Universal Credit

The Labour Party put greater focus on reforming welfare to tackle poverty and encourage more people into work.

It specifically committed to reviewing Universal Credit “so that it makes work pay and tackles poverty,” although did not give further detail on what exactly the review would entail.

Sir Keir Starker promised to tackle child poverty and “end mass dependence” on emergency food parcels, calling them a “moral scar on our society”.

As part of this, he pledged to provide free breakfast to every primary school child.

Labour also said it would work with local authorities to get more disabled and sick people back into employment.

It added that there would be consequences for those who do not fulfil their obligations.

The manifesto was light on other social care policies.

Lib Dems

• £8billion pledged to health and social care reform
• Introduction of free personal care

The Lib Dems’ manifesto focused heavily on health and social care, pledging almost £9billion to improve services.

One standout promise was to introduce free personal care to elderly or disabled people at home, while everyone would have the right to see a GP within seven days or 24 hours in emergencies.

It claimed these plans would be funded by reversing tax cuts for banks and closing tax loopholes for the wealthy.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “If elected, the Liberal Democrats have promised a £9billion package for the NHS and social care – funded by a tax on banks.

“This would include free personal care for everyone who is older or has disabilities, a rise in the minimum wage for carers and overhauling the carers allowance system.”

Reform

• Help two million people back to work
• Enforce a two-strike rule for job offers
• Tackle benefit fraud

Reform’s draft manifesto promises a crackdown on benefits fraud and plans to help more people into work, although details are light so far.

FIRST TIME BUYERS

Tories

• Build 1.6million new homes
• Permanently abolish stamp duty up to £425,000 for first time buyers
• Finish Renters Reform Bill and no-fault eviction ban

The Conservatives made a fresh promise to deliver 1.6million new homes to free up stock for first-time buyers.

The party also promised to pass its Renters Reform Bill and finally abolish no-fault evictions, which would be great news for renters.

Another key pledge for homebuyers was to abolish stamp duty up to £425k.

However, it’s important to note that this is already the current threshold – although it had not been made permanent.

And experts have warned that while this pledge appears to make home-buying more affordable, but in reality it may not be enough to entice young voters.

Myron Jobson, senior personal finance analyst at Interactive Investor, said: “While stamp duty on property purchases can make a profound difference to affordability, the main barriers to entry for many first-time buyers are high mortgage rates as well as the ongoing resilience in property prices, underpinned by the ongoing demand-supply imbalance in the housing market.”

Labour

• End leasehold and tackle ground rents
• Ban no fault evictions
• Build 1.5million new homes

Labour has pledged to build 1.5million homes if it wins government, which it said would help get more people onto the property ladder.

It said it would strengthen rules requiring more affordable homes to be built, and would ensure first-time-buyers could buy properties on new developments before they were sold overseas.

It also promised to end the much-maligned leasehold system, where homeowners do not own the land their property is built on, and would tackle unaffordable ground rents.

The party would also ban no-fault evictions “immediately”, which would provide much-needed security for renters.

Jamie Gollings, deputy research director at Social Market Foundation, said: “This, alongside banning new leasehold flats and preventing extortionate ground rents and service charges will be welcome news for private renters.”

Lib Dems

• Build 380,000 new homes a year during term, including 150,000 social houses
• Ban no-fault evictions immediately
• Abolish leasehold

The Lib Dems have sought to out-do Labour and the Tories by pledging a record 380,000 homes a year – 1.9million in total.

It has also stuck with the rest in promising it would scrap no-fault evictions, but went further to confirm it will abolish leaseholds and cap ground rents at a small figure.

Reform

• Fast-track planning on brownfield sites

Reform’s key pledge to help with housebuilding is to focus on getting permission granted on brownfield site developments faster.

It also said it plans to reverse 2019 changes to buy to let, which it said have made it less attractive to be a landlord – meaning less rental supply.

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