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General Election 2015 How will the result impact on your wealth?


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General Election 2015

On Friday 8 May 2015, it was confirmed that the Conservatives had scored a surprise election victory (albeit with a small majority) – a result that not many had expected.

Housing market

The Conservatives now have a clear run at enacting their pledges, so we thought it prudent to take a look at exactly what they promised and how it could impact on your finances.

Would-be first-time buyers can be pleased that a Tory win means the Help To Buy ISAs will definitely go ahead. That will mean new buyers’ deposit savings get a £50 state top-up for every £200 they save – up to a maximum payout of £3,000.

What does the Tory win mean for your money? The pledges the party made will affect Britons regardless of their life stages: pensions changes made now will affect workers today in decades to come, and firsttime buyer policies will affect the market for all homeowners, landlords and renters.

However, it’s worth mentioning that the Institute for Fiscal Studies said this could drive up house prices.

Help To Buy equity loans will be extended to 2020, while the mortgage guarantee scheme will be extended to 2017, helping both new buyers and second steppers. Some critics suggest all the assistance offered to first-time buyers is going to drive up house prices and affect

General Election 2015 How will the result impact on your wealth? Taxes The Conservatives made pledges to raise the personal allowance to £12,500, as well as upping the 40% tax threshold to £50,000. That 40% threshold is quite a hike from the current level, which stands at £42,386. The party also promised no rise in VAT or National Insurance under their governance. A much-publicised pledge was its plan to increase the inheritance tax threshold to £1 million for married couples or those in a civil partnership.

the next generation of buyers, but in the immediate future it should make it easier to get a foot on the property ladder. It remains to be seen whether the Conservatives drive ahead with their flagship Right To Buy policy, which would allow housing association tenants to buy their homes at a considerable discount. This plan drew harsh criticism, even from fellow Conservatives, amid claims it would massively reduce the availability of social housing while unfairly benefiting a lucky few at the expense of those forced to rent privately.

On Friday 8 May 2015, it was confirmed that the Conservatives had scored a surprise election victory (albeit with a small majority) – a result that not many had expected.


General Election 2015

The Conservative manifesto also pledged to oversee the building of 200,000 affordable homes, available at a discount to new buyers.

Pensions The coalition Government introduced new retirement rules that gave people aged 55 and above far greater freedom to access their pension pots, allowing them to take the cash to spend or invest as they saw fit. It was possible the next government would reintroduce some restrictions over pension pots, but that is unlikely to happen under a Conservative government. The Conservatives promised to keep a triple lock on pensions, which means the State Pension will rise each year either by consumer price inflation, average earnings or 2.5%, whichever is higher. However, that was something all three main parties had pledged, so a Tory win makes little difference. Essentially, the Tories have promised to maintain the status quo on pensions, although they will be rolling back tax relief for those earning over £150,000 a year.

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The coalition Government introduced new retirement rules that gave people aged 55 and above far greater freedom to access their pension pots, allowing them to take the cash to spend or invest as they saw fit. automatically entitled to Housing Benefit, regardless of their situation. The Conservatives say they will aim for full employment among those who want to work, and they have pledged to fund 3 million more apprenticeships, partly paid for by the tighter benefits cap.

Childcare At the moment, parents receive up to 15 hours of free, term-time childcare a week for 3 and 4-year-olds. The Conservatives have pledged to double that for working parents, meaning up to 30 hours of free care a week.

The known unknowns Benefits Anyone relying on benefits may now be feeling nervous as the Conservatives have pledged to reduce the welfare bill by a further £12 billion, including lowering the household benefit cap from £26,000 to £23,000. That doesn’t mean households living entirely on benefits will all be given £23,000, but it means they cannot receive more than that. The Tories also plan to freeze benefits until April 2018. As yet, we have not been told where the remaining cuts will come from. Jobseekers Allowance for 18 to 21-yearolds will be replaced with a Youth Allowance. It will only be available for six months, after which they will have to work or study to qualify for payments. Young people will no longer be

There is a lot about the next parliament we don’t yet know, including where and what is still to be cut. When the Institute for Fiscal Studies examined the Conservative manifesto, it accused the party of leaving voters in the dark over where the cuts would come, saying the plans were ‘predicated on substantial and almost entirely unspecified spending cuts and tax increases’. That includes £30 billion in ‘real cuts’ more from unprotected government departments. Once the dust settles and the Conservatives reveal more of their plans, we should have a clearer idea about what the win means for your finances. n


Time to review your financial plans post-Election 2015? To discuss how the 2015 General Election result could impact on your financial plans in the future, speak to one of our advisers for help and guidance.

1 The Bulrushes Woodstock Way Boldon Business Park Tyne & Wear NE35 9PF Telephone: 0845 6050689 Email: info@fairstone.co.uk Web: www.fairstone.co.uk Twitter: @FairstoneGroup The content of this guide is for your general information and use only, and is not intended to address your particular requirements. The content should not be relied upon in its entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of the content. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested.

Fairstone Financial Management Limited is authorised and regulated by the Financial Conduct Authority (FRN 475973) Levels and bases of and reliefs from taxation are subject to legislative change and their value depends on the individual circumstances of the investor. The value of your investments and income can go down as well as up and you may get back less than you invested.

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Time to review your financial plans post-election?  

To discuss how the 2015 General Election result could impact on your financial plans in the future, speak to one of our advisers for help an...