Which political party will be best for your finances?

4 May 2010

If you haven’t decided who to vote for you might want to look at what impact each party in power would have on your finances. But how well do you know the different parties’ policies?

Q: Which party is best for families or people planning a family?

If it stays in power, Labour will introduce a 'toddler tax credit' of £4 a week for families of one and two-year-olds. Labour would also extend the free nursery place scheme so three and four-year-olds also get 15 hours a week of free nursery education. 

Meanwhile, both the Tories and Lib Dems would cut child trust fund payments.

The Tories would also cut tax credits to families with incomes over £50,000. However, they also plan to extend the right to request flexible working to every parent with a child under the age of 18 as well as introduce a new system of flexible parental leave which lets parents share maternity leave between them.

Q: What will happen to tax and national insurance under the different parties?

Labour has pledged not to increase income tax but it would keep the 50% income tax band for people earning more than £150,000. The Tories would keep the 50% rate for the time being.

Labour intends to increase NI contributions by 1% from next year for those earning more than £20,000. The Tories will raise contributions only for those earning more than £35,000.

The Lib Dems have promised a “tax overhaul”. This will include making the first £10,000 of earnings tax-free for low and middle-earners. The move, the party says, will take 3.4 low earners out of tax altogether.

Q: How will stamp duty and property taxes change after the election?

Labour announced in the Budget that it would increase the stamp duty threshold from £125,000 to £250,000 for first-time buyers for the next two years. There would also be a new 5% rate of stamp duty for property transactions over £1m from April 2011.

The Conservatives plan to cut stamp duty permanently for first-time buyers and make it easier for social tenants to buy homes.

The Liberal Democrats would introduce a 1% "mansion tax" on properties worth more than £2m.

If they came to power, the Tories say they will freeze council tax rates for two years while the Liberal Democrats would scrap council tax and replace it with a new tax based on people’s ability to pay.

Q: Are the three main parties planning to change the pension regime?

Yes, all the parties would make some changes to pensions. Labour plans to increase the state pension age incrementally between 2024 and 2046 to 68 for both men and women. They also want to reform the basic state pension so that more women who have brought up children or care for others can claim.

The Tories plan to bring forward the date at which the state pension age starts to rise to 66, from no earlier than 2016 for men and 2020 for women.

All three parties plan to reinstate the link between earnings and the state pension.

Q: What’s the Conservatives’ new Consumer Protection Agency all about?

The Tories plan to introduce a Consumer Protection Agency that would take over some of the consumer protection roles currently performed by the FSA and Office of Fair Trading. It would also define and ban excessive borrowing rates on store cards as well as give clearer information on credit card bills and advertising.

The Lib Dems’ manifesto also includes measures to ensure banks can't charge customers unfairly for going over their limit or bouncing a cheque. They would also cap interest rates charged by credit cards and store cards.

Q: Which party is best for students?

The Liberal Democrats seem to be the only party going after the student vote. They would scrap tuition fees for all students taking their first degrees saving them nearly £10,000 each.

However the Tories say they would create 10,000 extra university places in 2010 and aim to introduce an early repayment bonus on student loans. 

Add new comment