Conservative manifesto: what it means for your pocket

1. Pensioners could be better off.
2. There may be more certainty over pension rules.
3. You might pay less NI – but not necessarily less tax.
4. It could be easier to buy a first property.
5. Parents could get more support.
6. There may be progress on capping the cost of social care.
7. You might get another chance to ‘Tell Sid’.
8. There’s a commitment to some existing tax rules for investors.
9. There seems to be mixed news for renters.
10. Those relying on benefits could find life tougher.

Sarah Coles, head of personal finance, Hargreaves Lansdown:

“The manifesto leaks meant there wasn’t an awful lot left in the tank for surprises at the Conservative manifesto launch. Instead, the Silverstone event stuck to the tax cut line with £30 billion of tax cuts over the course of the parliament – with extra bonus savings for pensioners. There was also a drive-thru of leaks and previous announcements, many of which have implications for your finances.”

Helen Morrissey, head of retirement analysis, Hargreaves Lansdown:

1. Pensioners could be better off

“Pledges to maintain the triple lock came early in the campaign, but in a major rabbit-out-of-the-hat moment, the Conservatives went one step further, with the triple lock plus. Under the pledge, the personal allowance for pensioners will rise every year, so they won’t pay tax on their state pension. It’s a strong response to the issue of frozen tax thresholds pulling more pensioners into tax-paying territory.

Under the plans, from April 2025, the personal allowance for pensioners would rise by the same amount as the triple lock, which would mean the full new state pension – currently standing at around £11,500 per year – would rest below the tax-free limit. According to the manifesto, it amounts to a tax cut of around £100 for eight million pensioners next year – rising to £275 a year by the end of the Parliament.

It’s a controversial stance that will be welcomed by those who have had their budgets squeezed by the cost-of-living crisis. Others will question whether a state pension system that is already under pressure can withstand the extra cost.

The manifesto also promised to maintain all current pensioner benefits, including free bus passes, winter fuel payments, free prescriptions and TV licences for those who qualify.

2. There may be more certainty over pension rules

The manifesto has also moved to quell rumours that a new government might look to trim back pension perks more generally. Pension taxes are always a tempting prospect for a government looking to save money. However, under their Pension Tax Guarantee the Conservatives have promised not to introduce any new taxes on pensions so tax free cash and tax relief on contributions remain untouched, bringing much needed certainty for people looking to make the most of their pension contributions.

In the briefest of mentions, the Conservatives also reiterated support for the Mansion House reforms, which aim to stimulate pension investments into high growth companies. The Conservatives have made bold claims of the benefits of such an approach saying it could result in a 12% boost to a typical earner’s pension over the course of their careers.”

Sarah Coles:

3. You might pay less NI – but not necessarily less tax

“The key tax pledge in the manifesto is cutting National Insurance by 2p, which could save working taxpayers up to £754 each. The more you earn, the more you save, and someone on £35,000 will save £448. For self-employed people, the Conservatives say they would abolish the main rate of self-employed National Insurance by the end of the parliament.

However, this doesn’t necessarily mean working people paying less tax. The frozen income tax thresholds will still mean that as people’s pay rises, they automatically pay more income tax, and risk being pushed into a higher tax bracket. 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.

When you add this to a number of tax freezes and temporary cuts that are due to come to an end – including the reversal of the 5p cut in fuel duty and lower stamp duty on property for existing owners – it means that even while there’s all this talk of tax cuts, there’s every chance you could end up handing over more of your income to the taxman in future. So it’s worth taking sensible steps to ensure your finances are as tax-efficient as possible through things like ISAs and pensions

4. It could be easier to buy a first property

At the end of last year, the average property for a first-time buyer cost £237,655, so it’s no wonder it now takes people to the age of 30 on average before they can afford a place of their own. The manifesto included a number of pledges designed to make things easier. There was a commitment to keep the temporary stamp duty holiday on homes costing up to £425,000 for first time buyers, although there’s no matching commitment to extending the stamp duty holiday on homes for other buyers. It was an announcement that embodies a tax rise, positioned as a cut.

It also proposed a new Help to Buy equity loan scheme – offering up to 20% towards the cost of a new-build, so buyers only need a deposit of 5%. This scheme has made a demonstrable difference to buyers’ ability to stretch to a deposit. However, there’s also a real risk it pushes up the cost of new-builds – unwinding many of the benefits. Currently, the average price of a new build is £388,789, which is up an eye-watering 17% in a year. Compare this to the average price of resales at £276,194 – which is down 1.8% in a year. The Conservatives have also pledged to continue the Mortgage Guarantee Scheme.

The manifesto suggests a temporary two-year capital gains tax holiday for landlords who sell to tenants, to incentivise them to sell to those who already live there. We will have to see whether they are prepared to do this, or whether in an environment where prices remain robust, they chance their arm with a sale on the open market.

Plus, the manifesto said it would speed up the planning process to build more homes on brownfield sites in urban areas.

The Lifetime ISA can make a significant difference to first-time buyers, by adding a 25% bonus on the first £4,000 of savings a year. HL would like to see the property limit of £450,000 tied to house prices, to ensure nobody is forced out of the scheme through house price rises. We also want to see the penalty for early withdrawal for any reason other than buying a first property be cut to 20%, so it effectively just removes the government bonus, without taking a chunk of people’s savings too.

5. Parents could get more support

Policies for parents had already been announced in the Budget, but the manifesto highlighted that the roll out of free childcare for children aged 9 months and over will continue – and be complete in September 2025.

The Conservatives also aim to move the high income child benefit charge to a household basis, although changing the basis of income assessment is no small undertaking, so we can’t expect transformation overnight.

6. There may be progress on capping the cost of social care

The manifesto committed to a multi-year funding settlement to support social care, and to act on reforms laid out in its White Paper. This could include a cap on care costs and a more generous means test of £100,000 to qualify for some help before the cap kicks in (those with less than £20,000 pay nothing).

This would bring essential certainty, which wouldn’t just benefit those who need care, but those who are sitting on large cash hoards in high street bank accounts just-in-case. It would allow older people to put that money to the best possible use instead. For some, it would mean spending on improving their quality of life right now. For others, it would mean investing in a stocks and shares ISA, to give their money the best possible chance of growth over the long term – once the risk of having to dip in at short notice has passed.  And for some it would mean having the freedom to pass money on during their lifetime.

7. You might get another chance to ‘Tell Sid’

There are few details, but the manifesto has committed to the sale of the Natwest shares to retail shareholders. We will have to wait to see what that sale might look like, but there’s a chance it could spark some of the ‘Tell Sid’ enthusiasm of previous sales of state-owned businesses.

8. There’s a commitment to some existing tax rules for investors.

The manifesto has pledged not to increase capital gains tax. It also said the Conservatives will keep tax incentives – including the Enterprise Investment Scheme and Venture Capital Trusts.

9. There seems to be mixed news for renters

The manifesto promises a Renters Reform Bill which would end no-fault evictions and shore up tenant rights. This had been in progress before the election was called, so this is a commitment to get it back on track. This is fundamentally good news for renters, but comes with a sting in the tail. If it persuades more landlords to sell up, it could mean even fewer rental properties around and even higher rents.

10. Those relying on benefits could find life tougher

There would be £12 billion of welfare cuts under a number of manifesto pledges. Interviews to assess capability to work would be tightened, and fit notes would no longer be completed by GPs and could be integrated into processes designed to get people back to work. It would also introduce more sanctions, so those who refuse work after 12 months on benefits can have their cases closed and benefits removed entirely.”