The Conservative Manifesto: what it means for your finances

18 May 2017

It’s the last of the three major political parties to announce its plans if it gets re-elected, following the launch of the Liberal Democrat and Labour manifestos earlier this week. 

Moneywise has gone through the manifesto and highlighted below which elements will affect your finances. See our election 2017 homepage for our round-up of the three major party’s personal finance policies.


State pension triple lock to be replaced. The Tories will maintain the triple lock until 2020 (as per it’s 2015 general election pledge) but will then replace it with a new ‘double-lock’. This will see state pension payments rise in line with the higher of wages growth or inflation, with the current 2.5% base line guarantee being abolished. According to the Office for Budget Responsibility retaining the triple lock would cost £15 billion more than earnings increases by 2060. Both the Labour and Liberal Democrat parties have pledged to maintain the triple lock.

Tom McPhail, head of policy at Hargreaves Lansdown, says: “The Triple Lock has largely done its job in improving pensioner incomes in recent years and protecting the retired population from the effects of the post 2008 recession. A double lock still provides a more robust level of security than is enjoyed by the majority of the working population.”

Increases to state pension age: The manifesto also confirms that the state pension age will go up according to increases in life expectancy.

Mr McPhail adds: “The Conservatives have also confirmed state pension ages will rise, though they have ducked until after the election the question of how far and how fast. Those aged in their early 40s and below should brace themselves for another year or two of work before getting their state pension; age 70 still looks on the cards for those in their 20s and 30s."

Auto-enrolment: The Tories will continue to support auto-enrolment, with a focus on extending workplace pensions to smaller employers and the self-employed.

Increased protection for defined benefit pension schemes: Following the high-profile collapse of the BHS pension scheme  and ongoing problems with British Steel, the Conservatives have pledged to increase protection for members of private defined benefit pension schemes by tightening rules and increasing the powers of the Pensions Regulator. There will be a greater focus on the punishment of company directors that wilfully neglect pension schemes, with a possible new criminal offence for those who “deliberately or recklessly put at risk the ability of a pension scheme to meet its obligations”.


Funding for social care

Changes to means-testing for social care. A re-elected government would use the same means-testing calculation, whether care is received in the family home or in a care home. For the first time this will mean that the value of a person’s home will be taken into account when they are receiving care at home, not just in care homes. A new capital floor will also enable individuals to ring-fence £100,000 of their assets, including the value of their home.  

UPDATE (22 May 2017): This proposal has been widely criticised because it means people with more equity in their homes would have to pay more towards the cost of care. Less than a week after the manifesto was published, Theresa May confirmed that the Conservatives would also consult on a social care cap. This so-called 'dementia tax U-turn' would mean that there would be a cap on the maximum amount individuals would need to pay for their care.

Free bus passes and prescriptions protected. Pensioner benefits including free bus passes and prescriptions will be protected.


Ban letting agent fees. The Conservatives have maintained a previous pledge to ban letting agent fees in the near future. Both Labour and Lib Dem have announced the same pledge.

Reform and modernise the home-buying process. The Tories want to make the process more efficient and less costly. Unfortunately, there is no more detail on this policy at this time.

Crack down on unfair leasehold practices. This would include greater regulation on practices such as escalating ground rents.

Increase protection for renters. The Conservative party want to increase security for good tenants and encourage landlords to offer longer tenancies as standard. This is a key area Labour and Lib Dem are also campaigning on.

Deliver 1.5m new homes by the end of 2022. Delivery of 1 million homes by 2020 and an additional 500,000 by 2022. The manifesto makes clear it wants these new homes to be of a high quality standard, to prevent those on modest incomes from enduring sub-standard living conditions. The party has also affirmed that no building will take place on Green Belt, National Park, or ‘Areas of Outstanding Natural Beauty’ land. Labour has pledged the building of over one million homes, while the Lib Dems have committed to building 300,000 new homes a year by 2022.


Increase the personal allowance. The manifesto says that by 2020, the Conservatives will increase the tax-free personal allowance on earnings to £12,500. It’s currently at £11,500.  The Conservatives also want to increase the rate at which 40% income tax becomes payable from £45,001 at present to £50,000.

In the workplace

Increase living wage to 60% of median earnings by 2020. Based on a median income of £25,100 in 2015/16, for example, this would mean an increase of the living wage to £15,060 per year by the end of the next parliament. The Living Wage is currently £7.50 an hour for those aged 25 and over. However, pegging the growth of living wage to the median income in this manner can lead to a variation in this figure.   

Take measures to close the gender pay gap. The Conservatives say they will “require companies with more than 250 employees to publish more data on the pay gap between men and women”. This will go alongside working towards parity in the number of public appointments going to women. They will also push to increase the number of women sitting on the boards of companies.


Improve take-up of shared parental leave. More help will be given to companies to help them provide flexible work environments for mothers and fathers to share parenting, and support for people returning to work after a long break caring for a child or loved one. The Lib Dems want fathers to have an additional month’s paid paternity leave. They currently get one to two weeks of paid leave. Labour, meanwhile, wants to double paternity leave to four weeks and to increase paternity pay.

Household bills

Make mobile bills clearer. The manifesto states: “We will make billing for telecoms customers fairer and easier to understand, including making clear when a mobile customer has paid off the price of their handset.”

Cap energy prices. As already announced, the Conservative party will cap energy prices if they’re re-elected. They will also commission an independent review into the cost of energy, which will be asked to make recommendations as to how UK energy costs are as low as possible.

Stephen Murray, energy expert at MoneySuperMarket comments: “A price cap will have a profoundly negative impact on household finances in every corner of the country. The cap is designed to knock £100 off bills, but every day engaged customers could reduce their bills by up to £315. It would leave no space for movement to reflect wholesale costs, which will put suppliers under a huge strain and they may have no choice but to pull the cheapest deals from the market. It only takes a few minutes to switch tariff and save three times the “saving” the price cap is offering.”


Improve energy efficiency. In addition on energy policy, the Tories say they will improve the energy efficiency of existing homes by upgrading all fuel poor homes to EPC (Energy Performance Certificate) Band C by 2030. It will also review requirements on new homes.

End to universal winter fuel allowance. The winter fuel allowance which pays older people up to £300 each winter will be means-tested, ensuring the benefit is focused on less wealthy pensioners. The money saved will be invested in social care and the NHS. The Liberal Democrats have pledged to withdraw eligibility for the winter fuel payment from pensioners who pay tax at the higher rate (40%), while Labour says it will keep the benefit.

Introduce ‘Breathing Space’ for those in debt. This means that where someone is in serious problem debt, they may apply for legal protection from further interest, charges and enforcement action for a period of up to six weeks. Where appropriate, they will be ordered a statutory repayment plan to help them pay back their debts in a manageable way. The manifesto says this will give eligible debtors “time to seek advice and assistance to apply for a sustainable solution to their debt”.

Mike O’Connor, chief executive of StepChange Debt Charity, says: “We welcome the Conservative’s inclusion of a ‘Breathing Space’ commitment to help people manage debt problems. People recovering from debt need the right protections and sufficient time to recover a sound financial footing.” However, he adds: “In addition to better protections for people in debt, the next government should commit to action to prevent the 8.8 million people currently showing signs of financial difficulty from falling into serious hardship. 

School meals: All children in primary schools in England will be offered a free school breakfast but school lunches will become means-tested and available only to low-income families throughout the school year. The savings made from means-testing will be added back into the core school’s budget. The Lib Dems want all children in primary education to get free school meals. Currently, children in reception, year 1 and year 2, get free school meals in England, while children in England, Northern Ireland, Scotland and Wales get free schools if their parents receive certain benefits.


Rail ticketing review. The Conservative’s want to remove “complexity and perverse pricing” from the rail industry. They also want to introduce a passenger ombudsman to stand up for the interests of rail users. In addition, the party has pledged to introduce minimum service levels during periods of industrial dispute, which if not agreed upon voluntarily by unions and companies, will be enforced through legislation. Both Labour and the Lib Dems have announced rail policies as part of their manifesto pledges.  

Drive down motoring costs. On the motor industry, the manifesto says: “We will consider a ban on companies cold calling people encouraging them to make false personal injury claims. We will take steps to tackle rogue private parking operators. We will reduce insurance costs for ordinary motorists by cracking down on exaggerated and fraudulent whiplash claims.” 

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