The manifestos are out, and every party fighting for your vote in the general election has included promises that could have an impact on your personal finances. How much of your earnings you take home, what the state pension will be worth, and how easy it will be to get on the housing ladder are among the key policy battles. We’ve looked at the pledges in the Conservative, Labour and Liberal Democrat parties’ manifestos on these and other key areas.
Tax
Conservatives They are offering another 2p off the main class 1 national insurance contributions (Nics) paid by workers, taking the rate to 6% by 2027, and the abolition of class 4 Nics paid by the self-employed. (This year the government cut class 1 Nics from 10% to 8%, while class 2 – also paid by the self-employed – was axed.) There will be no increase in income tax or VAT.
Labour The party promises taxes will be “kept as low as possible” for “working people” (it does not define this group), adding that “we will not increase national insurance, the basic, higher, or additional rates of income tax, or VAT”. It has not ruled out changes to council tax. It will introduce VAT on private school fees.
Lib Dems When the public finances are healthier they will increase the tax-free personal allowance, now frozen at £12,570 until 2028. This will benefit the vast majority of families, they say, and take “more low-paid workers out of paying income tax altogether”. They have pledged to overhaul capital gains tax, raising the annual allowance from £3,000 to £5,000 and adding new bands.
What the experts say Compared with the caution of the other main parties’ manifestos, the Tories’ £17bn tax giveaway is the outlier. Analysis by the Resolution Foundation thinktank found that while the 20% of richest households would gain £1,300 a year on average, someone earning £30,000 would see their tax bill fall by just £170. This is because for those on lower wages much of the benefit is eroded by frozen personal tax thresholds.
Frozen income tax thresholds “mean that as people’s pay rises, they automatically pay more income tax, and risk being pushed into a higher tax bracket,” says Sarah Coles, the head of personal finance at Hargreaves Lansdown. “Already, 2.1 million people have been dragged into paying income tax because of it. Another NI cut would bring down the rate of tax they pay but doesn’t unwind the fact they’re paying this tax in the first place.”
Pensions
Conservatives Labelling it a “pensions tax guarantee”, the party has promised to “not introduce any new taxes on pensions” – this means leaving the 25% tax-free lump sum available on retirement and offering tax relief on contributions at the current rates. For pensioners there is the carrot of the “triple lock plus” guarantee, under which their tax-free personal allowance would rise by the same amount as the state pension, so they do not have to pay income tax on it.
Labour A promise to retain the triple lock, so that state pension payments go up by at least 2.5% each year, and – in what is a common theme in the manifesto – to mount a “review” of the “pensions landscape” to examine what steps are needed to ensure people save enough to enjoy financial security in retirement.
Lib Dems The party is also committed to the triple lock and, after the ombudsman’s critical report on how so-called Waspi women were treated when their state pension age was increased, that they be “fairly compensated”.
What the experts say With all the main parties backing at least the triple lock, one of the big questions had been Labour’s plan to cap how much people can save into their pension before paying extra tax. The pensions lifetime allowance – called the “doctors’ tax” because of the way it encouraged senior NHS medics to consider early retirement – was £1.07m until it was scrapped in April. However, Labour has dropped its plan to reintroduce it.
Helen Morrissey, the head of retirement analysis at Hargreaves Lansdown, says the “triple lock plus” would amount to a tax cut of about £100 a year for 8 million pensioners in 2025 – rising to £275 by the end of the parliament. However, she says Labour’s decision not to trump this offer would please those who felt it favoured pensioners at the expense of working-age people.
Benefits
Conservatives To pave the way for tax cuts, they will cut £12bn a year from the benefits bill, including by reforming disability benefits. In a boost to high earners, they still intend to switch to calculating the high income child benefit charge on household rather than individual incomes. The manifesto pledges that families earning up to £120,000 a year will keep their child benefit.
Labour A significant point of interest in this area is what is missing from the manifesto, with no mention of reversing the two-child cap on certain benefits – a policy the party has previously opposed.
Lib Dems Not only would they remove the two-child limit, they would also scrap the benefit cap – the annual limit on how much individuals and families can claim in state help. Other changes include increasing the value of carer’s allowance and increasing the amount of other earnings people can have before it must be repaid.
What the experts say To save £12bn, as the Conservatives intend, “would involve getting 1 million people (19% of the total) off health-related benefits”, says Tom Waters, associate director at the Institute for Fiscal Studies. “Or it could mean applying big cuts to existing claimants, requiring something like a £2,200 cut a claimant a year.”
As for Labour, Jamie Gollings, deputy research director at the Social Market Foundation, said it was disappointing that a pledge to scrap the two-child limit was not in the manifesto, as it would be the “most obvious and impactful lever” to address rising child poverty. For low-income families with three children, scrapping it would increase entitlements by about £3,500 a year.
Home ownership
Conservatives They promise to fix the threshold at which first-time buyers in England and Wales pay stamp duty at £425,000 (it has been temporarily at this level since 2022). They are also pledging a “new and improved” help-to-buy scheme for first-time buyers, bringing back the offer of equity loans to help those with small deposits. They have pledged to complete the process of leasehold reform and cap ground rents at £250. A two-year temporary change to capital gains tax for landlords would allow them to sell to existing tenants without paying the tax.
Labour They will introduce a “permanent, comprehensive mortgage guarantee scheme” to help first-time buyers with small deposits – this will extend the current guarantee, which supports banks to offer 95% home loans.
They are also promising to build 1.5m new homes over the next parliament. There will be a review looking at how to protect leaseholders and a ban on new leasehold flats.
Lib Dems They pledge to increase the building of new homes to 380,000 a year, including 150,000 social homes. There is also a plan to abolish residential leaseholds and cap ground rents at a nominal fee. They will assist people who cannot raise a deposit with a new “rent-to-own model” for social housing, where rent payments give tenants an increasing stake in the property, owning it outright after 30 years.
What the experts say Labour’s policies would do the most to end the housing shortage, according to analysts, who say that, without more homes, demand-side measures such as stamp duty cuts and help-to-buy schemes just push up prices. Tim Bannister, Rightmove’s property expert, says: “Housebuilding needs to be accelerated, and creating a permanent mortgage guarantee scheme would at least give first-time buyers the certainty that the option will be there.” However, he adds: “One of the biggest barriers for first-time buyers is being able to borrow enough from a lender, which a mortgage guarantee scheme doesn’t address.”
Renting
Conservatives The renters reform bill was a casualty of the surprise election but they promise to pass it if they get in again and to abolish section 21 of the 1988 Housing Act, which allows no-fault evictions in England. The latter was promised in the 2019 manifesto, frustrated campaigners point out.
Labour On day one they will abolish section 21 evictions. They will also “empower” private renters to challenge unreasonable rent rises.
Lib Dems They will also ban no-fault evictions and make three-year tenancies the default.
What the experts say Gollings welcomes Labour’s pledge to “empower renters” to challenge big rent rises, but says it has not specified how it would do this.
Childcare
Conservatives They will press on with a plan to give working parents in England 30 hours of free childcare a week from when their child is nine months old to when they start school, set to be in place by September 2025.
Labour They aim to open more than 3,000 new nurseries by upgrading space in primary schools, to deliver the extension of government-funded hours already in train. They will also fund free breakfast clubs in every primary school, accessible to all children.
Lib Dems They will make flexible working a “day-one right” while doubling statutory maternity and shared parental pay to £350 a week. They will also introduce an extra “use-it-or-lose-it” month for fathers and partners, paid at 90% of earnings.
What the experts say With more than one in 10 swing voters rating childcare as a top-three issue, this is an important part of the manifestos. The Centre for Progressive Policy (CPP) says the expansion of free childcare planned by Labour and the Tories is a tall order for an already stressed industry as it will create a 52% rise in demand for places for under-twos by late 2025. Ben Franklin, its interim chief executive, says it is “great to see cross-party support for expanded, state-subsidised childcare”. But he adds: “Our modelling shows real challenges ahead. Almost 28,000 new childcare workers will be needed to make these plans a reality … and some of the poorest areas are those facing the greatest shortfalls.”
Green measures
Conservatives In keeping with its recent retreat from environmental policies, the party promises “no new green levies or charges”. It says it will also “back” drivers by reversing last year’s expansion of London’s ultra-low emission zone, which brought more motorists into the £12.50 a day charge.
Labour The “warm homes plan” earmarks an extra £6.6bn to improve the energy efficiency of 5m homes, with grants and low-interest loans to pay for insulation and improvements such as solar panels and heat pumps. The party pledges to ensure private rented homes meet minimum energy efficiency standards by 2030. It says “nobody will be forced to rip out their boiler as a result of our plans”.
Lib Dems The manifesto offers a 10-year “emergency upgrade” programme that includes incentives to install solar panels and heat pumps, and a social tariff to help households and to eliminate unfair regional differences in domestic energy bills.
What the experts say “It is good to see promises of investment in energy-efficiency upgrades in the party manifestos,” says John Herriman, chief executive of the Chartered Trading Standards Institute. But he adds: “This is an area that is crying out for clarity and improved consumer confidence, with a bewildering array of funding schemes, new technologies and different organisations with overlapping remits creating a muddled picture.”
Social care
Conservatives A pledge to implement their delayed plan to cap social care costs in England at £86,000 from October 2025. (Social care is devolved, so every home nation can take its own approach.)
Labour The big idea is for a new National Care Service, featuring national standards so everyone gets the same level of care wherever they live, and to build consensus for the longer-term reform needed.
Lib Dems They plan to introduce free personal care based on the Scottish model and set up a cross-party commission to come up with a long-term agreement on sustainable funding for social care.
What the experts say “Autumn 2023 was supposed to see the beginning of a new era in care funding after a decade of false starts,” says Stephen Lowe, of retirement specialist Just Group, about the delayed plan. “This was pushed back until October 2025. After decades of no delivery by successive governments, we will wait to see any policy successfully implemented before celebrating.”
What the other parties say
There will be no increase in the basic rate of income tax, but a new “wealth tax” set at 1% annually for individuals with assets above £10m and 2% for those with more than £1bn, as well as a pledge to reform inheritance tax. They would scrap the upper earnings limit for national insurance – currently there is a lower NI rate on earnings above the limit. They would also scrap higher-rate pension tax relief, by which higher earners get more paid into their retirement fund. The manifesto sets a target of 150,000 new social homes a year and gives local authorities powers to introduce rent controls. The party’s spending plans include £29bn to fund a five-year insulation drive designed to improve the energy efficiency of UK homes.
A plan to “make work pay” would raise the starting point for income tax from £12,571 to £20,000, while the 40% higher rate would kick in at £70,000 instead of £50,271 in England and Wales. There would also be big cuts to the stamp duty paid by movers in England and Northern Ireland: nothing on homes costing up to £750,000, then 2% up to £1.5m; above that it would be 4%. Inheritance tax would apply only to estates worth more than £2m, with the rate halved to 20%. There is a pledge to give parents 20% tax relief on school fees.
The party wants the Welsh government to have powers to set income-tax bands and thresholds, as in Scotland. They would investigate increasing the amount of national insurance paid by high earners and are in favour of a wealth tax. They want a “Welsh benefits system” starting with the payments linked to devolved areas such as health and housing. There is a call for child benefit to be upped by £20 a week (this would require change at the UK level or further devolution). Other pledges include free childcare from 12 months, and free school meals for all secondary school children.
No shortage of ambition here, with reversing Brexit among the manifesto pledges. Other promises include scrapping the two-child benefit cap and an “essentials guarantee” to ensure everyone can afford life’s basics. A statutory social tariff for energy, broadband and mobile contracts is also proposed, as well reducing standing charges, with people on prepayment meters to be exempted from them. Gaining control over employment rights would be used to increase the minimum wage. The party would also extend paid maternity leave to one year. This would be set at 100% of average weekly earnings for the first 12 weeks, then 90% for 40 weeks or £150, whichever is lower.
