Election time: which party promises most for your money?

What’s in Labour’s, the Conservatives’ and the Lib Dems’ manifestos?

In the past few weeks we’ve seen the headlines dominated by politics. 

And as it’s almost election time, we wanted to take you through the main parties, what financial promises they’re making and what it means for your money. 

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Manifestos: read all about it

But, before we get into each party’s manifesto, I wanted to highlight a few things.

If living standards and the UK’s services are going to improve, it’s going to have to be paid for. This could be through higher taxes or introducing new policies that may cost people more. 

And while the parties have outlined what they plan to do if they’re elected, there’s no guarantee that it’ll ever happen. We don’t know if these ideas have been accurately costed up or how they’ll be paid for, or if they’re even realistic.

So take it all with a massive pinch of salt. 

Plus it’s not just about voting for your preferred policies, it’s about voting for the party you think can actually deliver them.

We’ve focussed on the manifestos of Labour, the Conservatives and the Liberal Democrats below,. Some of you might be supporting the Greens, Reform, SNP, Plaid Cymru or other parties, and we’re not saying their manifestos aren’t important.

But, realistically, it’s the three major parties, though the Lib Dems to a lesser extent, where there’s a realistic chance of actually winning the election and therefore making these policies happen – so we’re focusing on what they’re proposing.

That doesn’t mean you should forget about your area’s MP though as they’ll be responsible for local issues. 

Labour

So first up, Labour.

Labour’s manifesto focuses on economic stability and growth. 

It also suggests its plans to make family finances more resilient and undo the damage caused by the Tory’s disastrous mini budget (which many of us are still feeling), bringing down food and energy prices, making housing more affordable, keeping mortgage rates low and providing better access to childcare.

But what else is it going to do?

Tax

Labour has promised not to increase income tax, national insurance or VAT.

But they say they will raise an extra £5 billion a year by closing the loopholes in Rishi Sunak’s ‘non-dom’ plan and cracking down on tax dodgers.

Property

Labour promises to build 1.5m homes over the next five years which it says is the biggest increase in social and affordable housing in a generation.

It also wants to introduce a permanent mortgage guarantee scheme to help first time buyers who struggle to save a deposit. The current scheme, which allows people to get 95% mortgages with a 5% deposit, is available until 30 June 2025.

Labour’s also looking at helping renters. It wants to abolish Section 21 ‘no fault’ evictions, where landlords can evict tenants with two months notice, prevent private renters being exploited and discriminated against and empower them to challenge unreasonable rent increases.

Leasehold flats come with a myriad of problems including expensive service charge and escalating ground rents. I had my own nightmare with my flat five years ago which came with some abysmal freeholders, before I got the Right to Manage. 

Labour has said it will ban new leasehold flats, ensure commonhold is the default tenure (also known as freehold) and tackle unregulated and unaffordable ground rent charges. It’s said it will also end the ‘injustice of ‘fleecehold’ private housing estates and unfair maintenance costs’.

Work

Labour’s manifesto also promised better rights for working people. As part of its ‘Plan to Make Work Pay: Delivering a New Deal for Working People’ the party wants to introduce protective legislation within 100 days. 

This will include banning exploitative zero hours contracts; ending fire and rehire; and introducing basic rights from day one to parental leave, sick pay, and protection from unfair dismissal. 

The party also wants to make minimum wage a genuine living wage. Andy and I spoke about this issue on the podcast after research suggested that even after the minimum wage increased in April, workers are still £1,092 short each year – and more than £3,300 short in London – compared to the real living wage.

Bills

We’ve all been hit with higher energy bills since towards the end 2021 after the energy crisis hit. As wholesale prices went up, cheap tariffs disappeared and companies went bust. Our energy bills are still much higher than before the crisis and around 4 in 10 adults (41%) who pay energy bills said it was very or somewhat difficult to afford them, according to the Office for National Statistics. 

Labour wants to set up Great British Energy, a publicly-owned clean power company, to cut bills for good and boost energy security, paid for by a windfall tax on oil and gas giants. The idea is to invest in cleaner energy, independent from dictators like Putin (who withheld resources during the crisis, leading to higher prices still). 

The party says it will also introduce tougher regulation on energy companies, holding them to account when they mess up and implement automatic compensation when things go wrong. 

It also promises to reduce standing charges. This is a fee that’s included in each electricity and gas bill, set by your supplier. And you’re charged it every day even if you don’t use any energy. 

Education

Currently private schools are exempt from paying VAT as are all organisations that provide education. And if they’re a charity, like half of them in England, they also get an 80% reduction in business rates. 

Labour plans to make private schools pay VAT and business rates which it expects will raise £1.5bn. However, parents, who already pay thousands of pounds a year for their kids’ private education, aren’t happy as they’ll have to pay even more. They won’t necessarily pay an extra 20% as it’s up to the school what they charge. 

Private school fees have increased by 20% since 2010, without VAT, according to the Institute of Fiscal Studies, and it’s not made any difference to the proportion of kids being privately educated during that time.

Labour also wants to introduce free breakfast clubs for every child.

Pensions

Labour’s promised to retain the triple lock for the State Pension. This keeps the payments in line with rising wages and inflation. 

Under the triple lock system, the State Pension goes up every April in line with the highest of either:

• Inflation (as per the Consumer Prices Index in the September of the previous year)
• The average increase in UK wages 
• 2.5%

Labour also plans to reform workplace pensions to deliver better outcomes for UK savers and pensioners – though it’s not given any details.

Conservative

Next, the Conservative party. If you’ve followed any of the reporting, the Tories are talking a LOT about tax. And not all of it’s true. 

You might’ve seen Rishi Sunak make repeated claims that Labour would raise taxes by £2,000 for everyone, in the TV debate earlier this month, which wasn’t explained nor made clear. 

The Treasury distanced itself from the figure and it turns out that rather than every person paying an extra £2,000 in tax a year, which was implied, the figure is per household over four years. And even then, that total is made up of different and sometimes questionable data sets.

The Conservative manifesto promises ‘a clear plan, bold action, secure future’, so let’s have a look.

Tax

The party wants to cut tax for workers by taking another 2p off employee National Insurance. This is a tax on earnings that goes towards funding state benefits, such as the state pension, jobseeker’s allowance and maternity leave. 

We’ve had two reductions in the past year and it now stands at 10%. But while we’ve technically seen tax cuts, they don’t necessarily mean a saving for everyone if the tax thresholds remain frozen. In fact, some people will be worse off. 

The Conservatives say by April 2027, the rate will have been halved from 12% to 6%, saving the average worker £1,350 (based on a £35,000 salary).

The party also promises to scrap National Insurance for self-employed people. They currently pay 6% of profits between £12,570 and £50,270 and 2% above. If the tax is abolished, 4 million people won’t pay it. It means a self-employed person with profits of £35,000 could save £1,346 per year.

However, there are already-planned freezes to income tax and NICs thresholds until 2027-28, which will push taxes up. Together, these policies would leave taxes £260 lower for an employee on £35,000, and £1,230 lower for a self-employed worker on the same amount in 2028-29, relative to today, according to the Institute for Fiscal Studies (IFS). 

It goes on to say: ‘Employees earning between £24,000 and £62,000 – who make up about 57% of employees – would pay less tax overall as a result of reforms between 2019-20 and 2029-30. But an employee working full-time on the minimum wage would see taxes increase by £240 from 2019–20 to 2029–30, while a self-employed worker earning the same would see a £300 tax cut.’

Pensions

Pensioners are also due a tax cut with the Tory’s ‘Triple Lock Plus’. If it’s introduced, it’ll guarantee both the State Pension and tax-free allowance for pensioners will always rise in line with the highest of inflation, earnings or 2.5%. 

The current personal allowance is £12,570. The state pension is £221.20 per week or £11,502.40 per year in the 2024/25 tax year, leaving just over £1,000 of the personal allowance. And as the State Pension increases, more pensioners will be pulled over the personal allowance threshold and will pay tax. 

From April 2025, the Conservatives say they will increase the personal allowance for pensioners. It’s not huge amounts – it’ll mean a £100 tax cut for eight million pensioners – rising to £275 a year by the end of the Parliament.

And for the WASPIs, the women who missed out because they were not informed about the rising pension age, the party says it’ll carefully consider the Ombudsman report and work with Parliament to deliver an appropriate and swift response. 

Work

The Tories promise to maintain the National Living Wage in each year of parliament at two thirds of median earnings. It’s currently £11.44 an hour and they say it will rise to £13 an hour, although they don’t state when. 

The rate is currently lower, and may not keep up with, the real Living Wage, currently £12 an hour, which is based on real living costs and is paid voluntarily by 14,000 employers.

Childcare

The Tories have included a big section on expanding childcare support in their manifesto – which is already being rolled out.

They’ve also included further changes to Child Benefit. 

Working parents get the benefit but if one of them earns over £60,000 they have to start paying it back on a sliding scale. If one earns £80,000, the charge is 100% so they pay back the entire benefit. 

In April, the lower threshold was increased from £50,000 to £60,000 and the Conservatives want to make other adjustments. But instead of basing the benefit on the individual income of each parent, they want to move to a household system. So a family won’t start losing the benefit until their combined income reaches £120,000 and they’ll have to earn £160,000 before they repay it completely. They say this will save the average family £1,500.

Bills

The party want to maintain the energy price cap and introduce more local energy markets for electricity which they say will save households £20-£45 a year.

The Tories say they’ll also introduce a Family Home Tax Guarantee which means they won’t review council tax bands or increase the number. However, as council tax is based on property valuations made 33 years ago, making it really out of date, maybe it could do with reevaluating?

Property

The plan is to build 1.6 million well-designed homes in the ‘right places’, permanently abolish Stamp Duty for homes up to £425,000 for first time buyers (there’s currently a temporary “holiday”) and introduce a new Help to Buy scheme.

The new scheme will offer first-time buyers an equity loan of up to 20% towards the cost of a new build home. Like Labour, they want to help first-time buyers buy a property with a 5% deposit. They also want to continue the Mortgage Guarantee Scheme.

In an attempt to woo the landlords, the Tories want to introduce a two-year Capital Gains tax relief for landlords who sell to their existing tenants. This means they won’t need to pay tax on the profit. 

The Conservative also promise to cap ground rent on leasehold properties at £250 a year and want to pass a Renters Reform Bill to ensure fairness in the rental market.

Liberal Democrats

The Libs Dems want a ‘fair deal’ for the country. Similar to Labour’s manifesto, it points out how families and pensioners are struggling with sky-high energy bills, food prices and housing costs – and it’s time for a change.

So what are they promising?

Tax

The party says its priority for tax cuts, when the public finances allow, will be to cut income tax by raising the tax-free personal allowance. It’s currently at £12,570 a year and if it’s increased, you’ll be able to earn more before paying tax. The Lib Dems say it’ll benefit the majority of families and will mean more low-paid workers won’t pay tax at all.  

Work

The Lib Dems promise to modernise employment rights which includes reviewing the tax and National Insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment. 

They also want to set a 20% higher minimum wage for people on zero-hour contracts at times of normal demand to compensate them for the uncertainty, and review the pension rules for those in the ‘gig economy’, which could include temporary or part-time workers and other non-permanent staff, so they don’t miss out.

Parents could see their parental leave expanded and lower-earners could be offered better sick pay. 

The Lib Dems promise to fix the ‘broken’ Statutory Sick Pay system by making it available to the one million workers earning less than £123 a week and aligning it with the National Minimum Wage. It’s currently £116.75 a week. If it was set at minimum wage at 35 hours a week, you’d get about £400.

Bills

Energy bills could be cut with the Lib Dem’s Home Energy Upgrade programme which would include free insulation and heat pumps for low-income households, incentives that cover the costs for installing heat pumps and energy discounts for vulnerable customers. 

Pensions

Like Labour, the Lib Dems promise to protect the triple lock of the State Pension.

And on the WASPI issue, they say they will ensure women born in the 1950s are treated fairly and properly compensated.

The Lib Dems say they are developing measures to end the gender pension gap in private pensions and ensure working age carers can save properly for retirement.

Capital Gains

Under the Lib Dems’ plan, there would be changes made to Capital Gains Tax to close loopholes exploited by the super wealthy. 

They want to introduce three rates of Capital Gains Tax, like there is for income tax: 20% (for gains up to £50,000), 40% (between £50,000 and £100,000) and 45% (over £100,000). It would be different to today, where your Capital Gains Tax rate is worked out by adding together your income and the profit, because it would solely be based on the gains. 

The capital gains tax-free allowance would go up from £3,000 to £5,000 and a new “inflation allowance” would be introduced so that any gains that are purely the result of inflation are not taxed at all. There would also be a targeted relief for small businesses.

Property

Like Labour and the Conservative party, the Lib Dems are also promising new homes. They say they’ll build 380,000 houses a year, including 150,000 social homes.

Leasehold tenures will be abolished and ground rents capped to a nominal fee

For renters, they’ll ban no-fault evictions, make three-year tenancies the default and create a national register of licensed landlords.

They promise to help people who cannot afford a deposit to own their own homes by introducing a new Rent to Own model for social housing. Rent payments will give tenants an increasing stake in the property and they’ll own it outright after 30 years. 

Childcare

Parents could get double the Statutory Maternity and Shared Parental Pay at £350 a week and fathers could get increased paternity pay at 90% of earnings, with a cap for higher earners. Paternity pay is currently £184.03 a week or 90% of earnings – whichever is lower.

The Lib Dems also want to introduce an extra ‘use-it-or-lose-it’ month for fathers and partners, paid at 90% of earnings. In the longer term, their goal is to give all families six weeks or use it or lose it leave for each parent, paid at 90% of earnings and 46 weeks of parental leave to share, paid at double the current statutory rate.

A ‘Toddler Top-Up’ will be introduced, an enhanced rate of Child Benefit for one-year-olds.

Free school meals will be extended to all children in poverty, with the aim of offering them to all primary school kids when public finances allow.