Helen Nugent

What the election result means for your finances

Well, I don’t think anyone expected that, least of all Theresa May. As the country picks over the result of the general election, financial experts are weighing up what it means for our money – and it’s not good news. Faith in the economy has been shaken, share prices for housebuilders and retailers have fallen, and the pound is down against the dollar and the euro. None of this makes for positive reading when it comes to disposable income. Pensions ‘A hung parliament is the worst possible outcome for pensioners and people saving for their retirement,’ says Tom Selby, senior analyst at AJ Bell. ‘We will now have a period of limbo while a new government is formed and we may well be heading back to the polls later this year. It means that key decisions around the state retirement age, the state pension triple lock, social care funding and pension tax relief are all going to take a back seat while the wheels of Westminster slowly turn.’ In addition, the Prime Minister’s decision to call a snap election derailed a number of key personal finance policies which were previously in train but omitted from the Finance Bill, including proposals to reduce the Dividend Allowance from £5,000 to £2,000 and a cut to the Money Purchase Annual Allowance (MPAA) from £10,000 to £4,000. Selby says: ‘The MPAA reduction is particularly problematic because the government said it would apply from 6 April 2017 but never actually put this into law. We therefore need urgent clarity on whether this will be applied retrospectively – this would be particularly harsh given many savers will have had no idea the new allowance had been announced.

‘A clampdown on pension scammers was also pushed back as a result of the election. The vital measures set out in the original consultation – which included a ban on cold-calling – need to be implemented as soon as possible to protect savers from fraudsters, but it looks like politics will get in the way of this important reform for a while longer.

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