Article reposted from AOL Money UK
Good Morning my darlings. I’m feeling a little less emotional about the election result (still angry though) and so I decided to look into what’s to come …
Few people predicted any one party could win outright but now the Conservatives have done just that.
Before today, the party manifestos were seen as starting points for coalition negotiations, but now that the Tories have won a small majority they will be able to implement their pledges.
So what were those pledges and how will they affect you? Let’s take a look…
The Tory manifesto was stuffed full of promises on tax, including raising the personal allowance to £12,500 and increasing the 40% tax threshold to £50,000. The threshold is currently £42,386, which means current higher-rate taxpayers could save a tidy sum.
A key Conservative pledge was on inheritance tax, with promises that the threshold will rise to £1 million for married or civil partnered couples. However, there have been accusations that this can only benefit the very wealthiest.
Conservatives also pledged there would be no rise in VAT or National Insurance during the lifetime of the parliament.
Some people had been wondering if a new government might roll back some of the recently introduced pension freedoms, so there could be a sigh of relief that the Conservatives have essentially pledged ‘more of the same’.
The new retirement rules that allow the over-55s to access their pension pots to spend or invest as they like will continue and there could be more restrictions lifted in the future.
Like all the main parties, the Tories had pledged to keep the triple lock on the state pension. That means that it will rise each year by either average earnings, inflation or 2.5% – whichever of those numbers is higher.
The Conservatives did pledge to restrict pension tax relief for those earning more than £150,000 a year, which may not be so popular among their wealthier supporters.
Your house price…
There was a lot of help promised to house buyers, including extending the Help To Buy equity loan scheme to 2020 and the mortgage guarantee scheme to 2017. Those schemes are most likely to benefit first-time buyers but could also help second steppers, which could keep the whole housing market moving.
Some people have raised concerns that the extra support is simply going to drive up house prices, although increasing sales and mortgage availability could be good news for anyone planning to downsize over the next few years.
One pledge that attracted a lot of criticism was the Tories’ plan to roll out the Right To Buy scheme so that housing association tenants could buy their homes at a considerable discount. This scheme is not universally supported even by the Conservatives, so it remains to be seen if it actually comes to pass. However, selling off social housing could drive more tenants into renting privately, which could be good news for landlords.
If you receive any benefit at all then you may have cause to worry about the election result. The Conservative manifesto pledged to cut the benefits bill by a further £12 billion, although it did not say exactly where the axe might fall.
The Tories have also promised to reduce the benefit cap even further. It is currently a maximum of £26,000 per household but this is now likely to fall to £23,000 per household, regardless of how many children live there. Benefits could also be frozen until 2018, no triple lock guarantee there.
There will also be considerable changes for younger claimants. Those aged between 18 and 21 will now lose their Job Seekers Allowance, and it will be replaced with a Youth Allowance. That will only be paid for six months, after which they will be forced to study or carry out unpaid work if they want to keep qualifying for their money.
Young people will also lose their automatic entitlement to housing benefit, which critics have warned could lead to more youth homelessness.
Working parents will be boosted by a hike in the number of free hours of childcare they get each week. At the moment, three and four-year-olds receive 15 hours of free term-time childcare each week, but the Tories have promised to raise that to 30 hours a week for parents who work.
There are still a lot of cuts to come from this Conservative government. Not only are there £12 billion of unspecified cuts planned for the welfare bill, but also there will be £30 billion in real terms cut from the budgets of unprotected government departments.
Those are considerable cuts and we won’t know how they will affect us until the election dust settles and the Tories spell out their plans in more detail.
Just for fun, here’s a picture that sums it all up rather nicely