We look at the likely impact of the election result on your personal finances.
The Conservatives promised in their manifesto not to raise income tax, National Insurance or VAT in the next parliament.
They also said they will increase the threshold at which people must start paying National Insurance from £8,632 to £9,500 from next year. On average, this should put an extra £85 a year in people’s pockets, according to the Institute for Fiscal Studies (IFS).
The Chancellor hinted that he wanted to scrap Inheritance Tax (IHT) at the Conservative conference in September, but as yet there’s been no official confirmation of any changes to the tax, which is payable after death at a rate of 40% on the value of your estate over £325,000, or £650,000 if you’re married or in a civil partnership.
The State Pension is protected by a ‘triple lock’ promise, which means it is guaranteed to rise each year by the higher of the Consumer Prices Index September measure of inflation, average wage growth, or 2.5%. The Conservatives have pledged to keep the triple lock and to maintain the winter fuel allowance and bus passes for older people. The party hasn’t, however, announced any changes to its plans to axe free TV licences for those age 75 next summer.
The party has also committed to bringing back the Pensions Bill which will introduce greater protection of members of company pension schemes, and bring in Pensions Dashboards so that savers can see all their pensions in one place.
The State Pension age is set to continue to rise to 67 by 2028 and 68 by 2039 under the Conservatives.
Property and mortgages
House-building will be a priority for the Conservatives, whose aim is to build 300,000 homes a year by the mid-2020s.
The Conservatives have also said they want to see new ‘lifetime’ fixed rate mortgages introduced, which will protect first-time buyers from fluctuating interest rates. There will be support for those renting too, with the party pledging to end evictions which aren’t the fault of the tenant, and announcing support for a scheme which would allow renters to transfer their deposit from one property to another.
No-one needing care will have to sell their home to pay for it, the Conservatives have promised, claiming that they will seek cross-party consensus to address social care challenges. They have pledged extra support to people who need social care now.
The pound immediately rallied following the Conversative win, and the party’s clear majority may help strengthen sterling further in weeks to come, provided trade negotiations with the EU start to gain momentum. A stronger pound makes holidays overseas a little less expensive.