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13 Dec 2019

Election 2019: what a Conservative government will mean for your money

Find out what the Tories have planned for tax, pensions, benefits and more

The Conservatives have won the 2019 general election with their biggest majority since 1987.

Here, Which? highlights what the Tories have promised on key financial issues, including tax, pensions and benefits.

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Brexit: UK will leave the EU by the end of January

With a Conservative majority, Boris Johnson should have enough backing from MPs to take the UK out of the European Union in a matter of weeks.

Following a cabinet reshuffle on Monday, the Brexit bill will go before MPs on Friday 20 December with a view to leaving the EU by the end of January.

The Conservatives have also promised to negotiate a trade agreement with the EU next year and said they will refuse to extend Brexit completion before the end of 2020.

Budget: it will happen in early 2020

With the election out of the way, the Queen's Speech, which reopens Parliament, is expected on Thursday 19 December.

It's expected that a major cabinet reshuffle will take place in February once the UK has left the EU. Many are predicting a Budget early next year.

Tax: National Insurance overhaul could provide pay boost

The Conservatives have committed to introduce a 'triple lock' on income tax, National Insurance and VAT.

This is a promise to not raise rates on our wages or the things we buy for the next five years.

Their manifesto also included a commitment to raise the National Insurance threshold to £9,500 in 2020, which the Tories say will represent a tax cut for 31 million workers.

Their ambition is to eventually raise the threshold further to £12,500.

National Insurance contributions are a tax of 12% taken off your salary above a certain level - currently £8,632.

Housing: longer-term fixed-rate mortgages

The Tories' housing policies included a promise to encourage a new market of long-term fixed-rate mortgages.

The most common long-term fixed-rate mortgages last between five and 10 years. But this year we've seen Virgin Money and a handful of others launch fixed-rate mortgages lasting 15 years.

The pledge could see 25 and 30-year mortgages becoming more common.

Other promises include a commitment to offer more homes to local families with a discount of up to a third for those who cannot afford to buy in their area.

There are also plans to simplify the shared ownership scheme by introducing a single standard for all housing associations, and Right to Buy could be extended.

A new stamp duty surcharge will be introduced on non-UK resident buyers.

The government will also continue with its ban on the sale of new leasehold homes and restricting ground rents to a peppercorn, as well as providing redress for tenants that have been caught out.

For renters, the government plans to abolish 'no fault' evictions and look at plans to introduce a 'lifetime deposit' that moves with tenants.

Pensions: state pension to rise by at least 2.5% a year for the next five years

The Conservative manifesto pledged to keep the state pension 'triple lock' in place in the next parliament.

This means the state pension will increase by inflation, wage growth or 2.5% each year - whichever is highest.

Former Prime Minister Theresa May pledged to scrap the 2.5% guarantee in the 2017 election. But she was forced to abandon the pledge to win support from the Democratic Unionist Party (DUP).

Under the triple lock guarantee, the state pension will rise by 3.9% (wage growth) from April 2020, which means a pay rise of up to £343 a year.

The Conservative party has also pledged to:

  • Deliver a pensions dashboard, an online portal that will allow you to see all of your pension pots in one place
  • Launch a new style of pension, that will allow you to build up a pension pot with some guaranteed income in retirement
  • Fix a problem with some pension schemes, which sees people earning between £10,000 and £12,500 a year missing out on pensions tax relief
  • Introduce a bill that protects pensions from reckless company bosses.

The party has also committed to solving a tax issue that is creating enormous bills for highly paid NHS workers. Find out more in our guide to the pensions annual allowance.

Benefits: Universal Credit roll-out to continue

The Tory manifesto pledged to continue the roll-out of Universal Credit.

Universal Credit is a new system that replaces six existing benefits with one overall payment that is paid monthly and in arrears.

The scheme is gradually being rolled out across the UK, but has faced criticism over long delays pushing people into hardship.

The manifesto contained little detail on how ongoing complaints about these issues would be addressed.

Other benefit promises include a pledge to reduce the number of reassessments a disabled person has to go through to prove their disability and to extend entitlement to leave for unpaid carers.

Pensioner benefits including the older person's bus pass will also be unaffected.

Household bills: energy bills to be kept down

The Tories have pledged to inject £9.2bn to improve the energy efficiencies of homes, schools and hospitals.

Meanwhile, the energy price cap will remain. This is a limit on what energy providers can charge on their standard variable tariffs. It's meant to protect households that come to the end of a deal and don't switch.

The Conservatives have also pledged to keep the Winter Fuel Payment in place, which pays up to £300 to older people to help with heating costs during the colder months.

Childcare: more affordable help during the holidays

The Tories plan to establish a new £1bn fund to help create more high-quality, affordable childcare, including before and after school, and during the school holidays.

Jobs and pay: student nurses and teachers to get a boost

To help fulfil a pledge of introducing 50,000 more nurses (31,000 of which would be new recruits), the Conservatives plan to introduce a maintenance grant for students worth up to £8,000 a year.

Teacher's starting salaries will be raised to £30,000.

Social care: additional funding from April 2020

A major Tory pledge is a 'guarantee' that no one that needs care will have to sell their home to pay for it.

To help realise this promise the party will move to form a cross-party agreement over funding.

In the meantime, it will provide £1bn additional funding beginning in April 2020, and every year of the next parliament.

Everyday finances: free hospital parking and no more 'tampon tax'

The Conservatives also plan to take action on hospital car parking fees.

The party has promised to end hospital car parking charges for those in greatest need, including people with disabilities and staff working night shifts.

A Which? Freedom of Information request found hospital trusts in England made more than £254m from car parking charges last year.

The hated 'Tampon Tax', which adds a 5% VAT charge on sanitary products will be abolished after the UK leaves the EU.

Transport: pothole problem in the spotlight

The Tories say they will address the state of the UK's roads by launching the 'biggest ever pothole-filling programme.'

Other transport promises include a new rail line connecting Leeds and Manchester, funding for city regions to upgrade their bus, tram and train services.

The party has said that it will invest £1bn in completing a fast-charging network to ensure that everyone is within 30 miles of a rapid electric vehicle charging station.

Plans to create a new £350m cycling infrastructure fund to support commuter cyclists also featured in the manifesto.

Find out more:how to report a pothole and claim compensation

Student finance: loan interest rates could be changed

Student finance was also on the Conservative agenda.

Their manifesto contained a woolly promise to review interest rates on student loan repayments.

This follows a review led by Philip Augar which found some aspects of the current system 'unfairly punitive' and recommended reducing students' in-study interest charges and capping graduates' lifetime repayments.

For now, it looks as if the current freeze on tuition fees in England at £9,250 will continue.

What Which? wants from the next government

Which? has set out six commitments for the government to deliver positive, tangible improvements for individuals across the UK.

These include providing banking services that work for everyone, better protection over unsafe products and fairer pensions.

Find out more in our consumer agenda for the government.