It hardly seems possible - where does the time go? - but the general election takes place next week. Following the suspension of electioneering after the atrocity in Manchester, the political parties have returned to the campaign trail with all kinds of promises designed to lure the electorate to their respective sides.
As far as personal finance is concerned, there's a myriad of key pledges. Tom Selby, senior analyst at AJ Bell, takes a closer look at the Tories and Labour.
· Raise the personal allowance to £12,500 by 2020
· Increase the higher rate tax threshold to £50,000 by 2020
· Increase the Living wage – currently set at £7.50 per hour – to 60 per cent of median earnings by 2020
· Extend automatic enrolment to the self-employed
· Replace the state pension ‘triple-lock’ with a ‘double-lock’ from 2020
· Introduce a £100,000 capital floor for people paying social care costs
· Introduce a cap on long-term care costs (rejected in the manifesto but subsequently announced by Theresa May)
Selby says: 'There was much heat but little light in the Conservative manifesto, with the launch overshadowed by Theresa May’s dramatic U-turn on capping social care costs. Despite making interventionist noises in markets where she sees failure – such as energy - Theresa May remains a traditional low-tax Conservative. Her pledge to continue with planned rises to the personal allowance will boost most workers, with around 24 million basic-rate taxpayers set to be £33 a year better off in today’s prices under the plans.
'Higher earners will also benefit from the party’s commitment to raise the higher-rate tax threshold to £50,000 from 2020. Combined with the planned increase to the personal allowance, higher-rate taxpayers would gain £208 per year in total, the Institute for Fiscal Studies (IFS) says, while about half a million additional rate taxpayers – who do not get a personal allowance – will still gain £175 per year.'
· Will not impose an increase in income tax for those earning below £80,000
· Earnings above £80,000 taxed at 45 per cent; earnings above £123,000 taxed at 50 per cent
· Guarantees personal National Insurance Contributions and VAT will not go up
· Keep the Help to Buy shared ownership scheme in place until 2027
· Boost the living wage to £10 an hour by 2020
· Stop all planned state pension age rises beyond age 66 and retain the triple-lock
· Introduce a care cost cap, increase the asset threshold below which people are entitled to state support, and provide free end of life care
Selby comments: 'Where Theresa May promises to be a low-tax Conservative Prime Minister, Jeremy Corbyn is unashamedly standing on a "tax and spend" manifesto. However, the IFS reckons there is a £9 billion black hole in its budget, citing "some factual mistakes with regard to part of their tax avoidance package, optimistic assumptions and unspecified tax increases".
'Clearly higher earners will face the biggest burden in funding Labour’s ambitious spending plans – which include an extra £50 billion in spending on the state pension in 50 years’ time and £8 billion on social care. Labour has said it wants to take account of variations in life expectancy in the state pension system, although there is a danger this search for fairness will increase complexity and administration costs.'
What have the parties failed to mention?
State pension age hike
Selby says: 'The Conservative manifesto simply says the state pension age must reflect "increases in life expectancy, while protecting each generation fairly". Prior to the election being called an independent review commissioned by the Tories pointed to a rapid acceleration in retirement ages, with those in their early 40s likely to have to wait until they are 68 to get their state pension. Younger savers could be looking at a state pension age of 70. Given the political sensitivities of such a move, it was no surprise to see the Conservatives keep their cards pretty close to their chest on this policy.'
Pension tax relief
Selby says: 'The Labour manifesto makes no mention of pension tax relief whatsoever. This is something of a surprise given that its plans to increase taxes for higher earners will make pensions more attractive. Given the left wing nature of the Labour manifesto, it’s hard to imagine this was the policy intention and I would expect them to revisit this if elected next week.
'While the Conservatives’ tax plans will not push up the cost of pension tax relief, only time will tell if reform is genuinely off the table. With huge resource pressures on the NHS – and in particular the social care system – the temptation to once again raid pension tax relief might prove too difficult to resist.'
'The general election has put a spanner in the works of a proposed clampdown on pension scams which included a ban on cold-calling. It is a concern that neither party made specific mention of this in their manifestos.'
Helen Nugent is Online Money Editor of The Spectator