Financial Planning Matters: How elections affect your finances

Jonathan Beardmore

Jonathan Beardmore, an Independent Financial Adviser at Pearson Solicitors and Financial Advisers, takes a look at the parties’ positions on key financial matters ahead of the elections on May 7.

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IT IS election time when politicians try to convince the people of the UK they will be better off under their respective administrations.

Central to the debate will be the issue of taxation – things need to be paid for but how exactly will this be done.

I read the manifestos of the two parties who formed the last government and the Labour manifesto (arguably I should also read the SNP manifesto).

I have looked at areas I think are vital for financial planning and tried to gauge what the parties’ positions are.


Surprisingly little is mentioned about saving in any of the manifestos – however there is news for first time buyers looking to use the new first time buyer ISA, with Labour claiming that they will “invest” any money into the “future homes fund”.

As a policy, I am not willing to comment, but as a financial adviser I would question what use this as an investment and certainly would not advise my current clients to invest this way.


Good news for pensions, the ‘pension freedoms’ look like they are here to stay with all the main parties.

There has been talk in the past about removing higher rate tax relief from pensions however this does not appear anywhere.

Capital Gains Tax

The two largest parties don’t mention capital gains in their manifesto – however the Lib Dems do, and they want to reduce the GCT allowance to around £2,500.

Both the Lib Dems and Labour party want to introduce a mansion tax on properties over £2 million. This could be the start of very worrying trend towards “wealth taxes” in the future.

Income Tax

Labour wish to reintroduce the 10% rate, remove the married couples allowance and raise the addition rate of tax to 50%.

Conservatives will rise the personal allowance to £12,500 and increase the tax threshold at which higher rate tax is paid to £50,000. Finally the Lib Dems will increase the personal allowance by the same amount but say nothing about higher or additional rate tax.


There are some consciences here with all three parties agreeing the “triple lock guarantee” will stay. However other benefits are at risk, the Lib Dems will withdraw some eligibility for the Winter Fuel Payment and free TV Licence and Labour will cut the Winter Fuel allowance for some pensioners.

For those retired people worried about passing on their estate to the next generation there is no mention of inheritance tax from anyone other than the Conservatives who have proposed a £175,000 primary home allowance.

Whatever happens post-election it’s going to be important to re-plan your finances to make use of new allowances or more likely to plan around new taxes.

For further advice or if you have any questions please don’t hesitate to call me on 0161 785 3500 or email



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