As Labour takes the reins of government, many of us are wondering what their plans mean for our wallets. If you’ve been feeling the pinch over the last few years, you’re not alone. This new government is promising changes that could have a real impact on your day-to-day finances. Here’s a look at 20 ways Labour’s policies might affect you, whether you’re working to make ends meet, raising a family, or looking out for your future.
1. Fairer Taxation—No Hikes for the Average Worker
Labour has promised not to raise income tax, National Insurance, or VAT, focusing instead on making the tax system fairer. This means you won’t be hit with unexpected tax hikes, which should offer some relief if you’re already feeling stretched.
2. Minimum Wage Increase
Labour is pushing for a “genuine living wage,” which could mean a pay rise for many, especially younger workers. By removing age bands, Labour aims to ensure everyone earns a decent wage, potentially lifting many out of low pay.
3. Help With Energy Bills
With energy costs soaring, Labour’s plan to cut household energy bills by up to £1,400 a year could be a lifeline. Their idea of creating a publicly owned energy company, Great British Energy, and offering grants for home upgrades like insulation and solar panels aims to lower your bills without forcing costly boiler replacements.
4. Free Childcare and Breakfast Clubs
Parents know how expensive childcare can be, so Labour’s commitment to expanding free childcare for under-fives and funding breakfast clubs in every primary school could ease that burden significantly.
5. Renters’ Rights Strengthened
If you’re renting, Labour plans to scrap Section 21 ‘no-fault’ evictions immediately, giving tenants more security in their homes. They also aim to ensure that rental properties meet energy efficiency standards by 2030, which could reduce your energy bills.
6. Support for First-Time Buyers
Getting on the property ladder has been tough, but Labour’s ‘Freedom to Buy’ mortgage guarantee scheme could help first-time buyers with smaller deposits. However, be aware that the stamp duty threshold for first-time buyers will revert to £300,000 in 2025, potentially increasing the cost of buying a home.
7. Focus on Affordable Housing
Labour’s ambitious plan to build 1.5 million new homes and develop new towns is aimed at increasing the supply of affordable housing. This could help ease the pressure on house prices and make it easier for your kids or grandkids to find a home.
8. Fairer Capital Gains and Inheritance Taxes
Labour is looking at raising capital gains tax and making it harder to avoid inheritance tax. While this might not directly affect you unless you have significant investments or wealth to pass on, it does mean the wealthiest will contribute more to public services.
9. No More Unchecked Spending
Labour plans to introduce a “fiscal lock,” meaning the Office must assess all spending and tax plans for Budget Responsibility. This should help prevent financial instability and avoid the chaos we’ve seen from sudden, unplanned tax changes in the past.
10. Keeping Public Services Funded
By closing tax loopholes and targeting the wealthiest, Labour aims to ensure that public services like the NHS remain well-funded. This could mean better services for you and your family without raising taxes on the average worker.
11. Public Sector Pay Rises
Labour supports pay rises for public sector workers, with recommendations for a 5.5% increase for teachers and nurses. While this could mean better-paid public servants, the cost will need to be covered—likely through higher taxes on the wealthiest or spending cuts elsewhere.
12. Inheritance Tax Tightened
Labour’s potential changes to inheritance tax could make it harder for the wealthy to pass on money and assets without paying their fair share. While this won’t hit most families, it ensures that those with more contribute more.
13. Windfall Tax on Energy Companies
Labour plans to introduce a windfall tax on energy companies’ profits to help fund public services and reduce energy costs. This means big companies will bear the brunt, potentially easing the burden on your bills.
14. More Secure Pensions
Labour has committed to keeping the state pension triple lock, ensuring that your pension keeps pace with inflation, wages, or a minimum increase of 2.5%. This could offer some reassurance for your retirement.
15. Reduced Costs for School Supplies
Labour wants to reduce the number of branded items that schools require children to use, helping to cut the cost of education for families struggling with tight budgets.
16. Energy Efficiency Upgrades
Labour’s plans to make homes more energy-efficient, with grants and low-interest loans, could lower your energy bills in the long run. While there might be some upfront costs, the savings could be significant over time.
17. Fairer Corporate Taxes
Labour’s move to close corporate tax loopholes means big businesses will pay more. While some worry these costs could trickle down, the aim is to ensure companies contribute their fair share without directly impacting your paycheck.
18. Public Services Over Profit
Labour’s focus on funding public services through fairer taxation could mean better access to healthcare, education, and social services. This might offer relief if you’ve been struggling with long wait times or underfunded schools.
19. Affordable Housing Initiatives
With plans to reform planning rules and build new towns, Labour aims to increase the availability of affordable housing. This could make it easier for your family to find a home that doesn’t break the bank.
20. Uncertainty and Change
While Labour’s plans are ambitious, change often brings uncertainty. Keep an eye on how these policies unfold, as they could bring both challenges and opportunities for your finances in the coming years.
Shifting the Burden
Labour’s approach is clear—they want to shift the burden from everyday workers to the wealthiest and ensure public services are properly funded. While some of these changes could bring relief, especially if you’ve been feeling the strain of tighter finances, others might pinch your finances in unexpected ways.
Featured Image Credit: Shutterstock / Martin Suker.
For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.
The images used are for illustrative purposes only and may not represent the actual people or places mentioned in the article.