The public have finally spoken (depending on your view of our current system, anyway) and that means we are now facing another five years under the Conservative government and David Cameron. Of course, different individuals will be affected in very unique ways, depending on their financial situation. According to the Tory manifesto, there will be changes for most people, some of which will help, and some of which will undoubtedly hinder, the lives of ordinary British people – after all, there is going to be a further £12billion cut to public spending. But what does this mean for you? We’ve broken it down.
Workers paying income tax
Income tax is set to go down, which can be seen as pretty good news for everyone, especially those on a low wage. Currently, you can earn £10,000 without paying any income tax at all, or around £42,000 before you go onto the higher earnings rate. However, the new Conservative government have pledged to raise this to £50,000 before anyone pays the 40% rate. Some might argue that this is counterproductive for a government wanting to reduce the deficit, as of course, the money will have to be recovered in other ways.
People on benefits
The welfare reforms of the Conservative Party are the ones which might really spell bad news for those on lower incomes. The benefits cap per household will be reduced from £26,000 to £23,000, affecting thousands upon thousands of families, no matter their circumstances. There will also be a freeze on some other pay-outs, and most 18-21 year olds will actually no longer be able to claim for housing benefit. There may even be sanctions placed on people who cannot work due to illness, if they refuse treatment programmes or other government sponsored initiatives. These cuts could prove very difficult for some of Britain’s poorest people.
Many children may lose their entitlement to early year’s support, meaning that low income families will struggle to afford childcare. Schools will also see education budgets slashed, which will in turn entail difficulties for the future going forward. However, there is brighter news in that there will be more availability of apprenticeships and work based training so that young people can gain new skills while earning money, hopefully meaning unemployment will fall.
If you’re on a pension, it’s not all doom and gloom. You’ll see a 2.5% increase in your pension, and your winter fuel allowance won’t be touched, either. This could be
First time buyers
David Cameron’s government say they’re committed to ensuring that first time buyers can get themselves firmly on the property ladder. They’re pledging to build 200,000 starter homes at a 20% discount, and they’re also starting a ‘Help To Buy’ ISA which will mean they’ll top up any savings up to £200 per month with a 25% bonus. This is great news for first time buyers in one respect, but unfortunately, it doesn’t meet the demand needed to solve the housing crisis as many more houses would need to be built.
People living in expensive houses
The Labour party wanted to bring in Mansion Tax measures, which would have meant that the 0.5% of the population who live in a home worth £2million or more would have to cough up to protect funding for the NHS. It would have done this whilst protecting those who were rich in assets but poor in other ways (for example, those who have expensive homes in the family but do not actually earn more than £42,000 per year). Now that this won’t be coming in, money will have to be found in other ways to keep the NHS and other services running.
People with small businesses
The Conservatives have pledged to back British businesses and encourage small businesses to thrive, by cutting associated taxes and lowering restrictions. It is hoped that this will be good for employment levels for the country.
People having to deal with inheritance tax
Losing a family member, especially a close one, is potentially the worst thing a person might ever have to deal with. Currently, the loss is made even worse by a hefty tax of 40% being imposed on all inheritance over £325,000. The government is increasing this to £1million, which will now mean that less people will have to suffer further blows during bereavement. This is a welcome reform, because rising house prices had meant that many people were forced to lose out.
People who take trains
If you’re a regular user of public transport, specifically trains, then the new government claims that it will freeze fares over the next five years.
People who watch live TV
The government have also said that the TV Licence Fee will not rise over the next five years. This is an applicable fee for anyone who watches live TV on any device.
Clearly, there will be winners and losers across the country. However, the Conservative Government might mean that unfortunately the wealth gap increases, instead of decreases. However, there are some positive and negative impacts most likely for everyone.