With Starmer’s resignation confirmed – many will be thinking how the recent political uncertainty could affect their personal finances and household budgets.
To help, Angeline Ong, Senior Investment Analyst at IG has looked at what this means for people’s pockets – from investments to savings & pensions.
Angeline Ong says:
“Britain is on course for its seventh prime minister since Brexit. So it’s hardly a surprise many are already asking: what does a Burnham government mean for me? As a worker? As a pensioner – and in general as someone just trying to make their money work its hardest?
Pensioners:
the triple lock is safe
“Burnham has boxed himself in on the triple lock – the rule that lifts the state pension each year by the highest of wage growth, inflation or 2.5%. That promise looks locked in for this parliament.
“He also appears to back Rachel Reeves’s plan to keep pensioners off income tax once their state pension rises above the frozen personal allowance of £12,570. In practice, that means millions of older people could be shielded from being quietly pulled into the tax system as their pension creeps up.
Workers: income tax and NICs stay put
“For regular taxpayers, Burnham has said he won’t raise income tax or national insurance for workers.
“But he’s hinted he might instead raise capital gains tax, bring in a bank tax or tweak the planned mansion tax on high-value homes from 2028. These are the kind of moves that let a government raise money from wealth without slapping on a headline tax that makes the headlines, and the opposition scream.
“There could also be changes to pension tax relief and even a cut in the tax-free pension lump sum. That’s the quiet, controversial bit chancellors have avoided for years, and we still don’t know if Burnham will step into that fight.
The big question: how will it all be funded?
“The Truss debacle taught us one brutal truth: promises don’t matter if you can’t explain how you’re paying for them.
“Right now, there’s real pressure on Burnham to be clear and upfront about his funding plan. If he doesn’t, the City and bond markets could react badly – pushing up borrowing costs, which in turn hits mortgages, pensions, and the cost of running the state.
“The real risk isn’t the policies themselves. It’s the market reaction if the funding story isn’t clear.”
The post Starmer exit fuels money worries: here’s what to know NOW appeared first on USNewsRank.
Discover more from USNewsRank
Subscribe to get the latest posts sent to your email.