So, Labour is in power, and if you’re like most people, you’re probably wondering what that means for your wallet. While they’re busy making big promises, you should be prepared for some real financial hits. So, how will Labour’s plans cost you more?
1. Income Tax Threshold Freeze
Labour might boast about not raising income tax, but here’s the catch: they’re keeping the Conservatives’ freeze on income tax thresholds until 2028. This means more of your hard-earned money will fall into higher tax brackets. That’s right — without lifting a finger, you’ll find yourself paying more.
2. Higher Energy Bills on the Horizon
Labour talks a big game about cutting energy costs, but their plans to reduce bills rely on becoming a “clean energy superpower.” Sounds fancy, right? But setting up a publicly owned energy company, Great British Energy, and retrofitting millions of homes? That’s going to cost—and don’t be surprised when those costs get passed on to you.
3. Stamp Duty Woes for First-Time Buyers
Thinking of buying your first home? Brace yourself. Labour’s plan to drop the stamp duty threshold back to £300,000 in 2025 will mean thousands more in costs if you’re buying in pricier areas. The days of easier entry into the housing market are numbered.
4. Mortgage Rate Uncertainty
Sure, Labour says they’ll keep mortgage rates low, but with the Bank of England running the show and inflation pressures looming, do you really trust that rates won’t creep up? If you’re a homeowner or planning to be, you’d better keep a close eye on this one.
5. Renters Face Rising Costs
Labour’s promise to abolish Section 21 ‘no-fault’ evictions sounds great on paper. But what about the landlords who’ll hike rents to offset their perceived risk? It’s not just landlords feeling the pinch—you’ll feel it too, with higher rents and fewer available properties.
6. Skyrocketing Minimum Wage Costs
Labour’s push for a “genuine living wage” sounds noble until you realize that it might lead to job cuts, especially for younger workers. Businesses are likely to pass these increased labour costs onto consumers, meaning you’ll pay more for goods and services.
7. Pension Tax Squeeze
Labour may have committed to keeping the state pension triple lock, but don’t be fooled—most pensioners will end up paying more in taxes. With income tax thresholds frozen, even modest pension increases could push you into a higher tax bracket.
8. Childcare Promises Come With a Price
Free breakfast clubs and expanded free childcare sound like a dream come true for parents. But let’s be real—these services don’t pay for themselves. Expect higher taxes or cuts in other services to cover the bill.
9. Inheritance Tax Changes
If you’re thinking of passing on your wealth, better think twice. Labour’s changes to inheritance tax rules will make it harder to gift money and assets without paying hefty taxes. The rich might bear the brunt, but anyone with savings could feel the squeeze.
10. Capital Gains Tax Hike
Labour is eyeing an increase in capital gains tax that could raise £8 billion. Got investments? Be ready to fork over more when you sell. This one hits both the small-time investor and the wealthy elite—no one’s safe.
11. Potential Windfall Tax Backfire
Labour’s windfall tax on energy companies sounds like a win for the little guy, but guess who’s likely to pay in the end? That’s right—higher prices for consumers as companies pass the costs down the line.
12. Public Sector Pay Hikes—At Your Expense
Public sector workers might celebrate their 5.5% pay increase, but guess where the billions needed to cover that are coming from? Increased taxes or cuts elsewhere—either way, you lose.
13. More Expensive Private Education
Thinking about private school for your kids? Labour’s plan to slap VAT on private school fees means you’ll be paying thousands more each year. And if you can’t afford the hike? Good luck with the overcrowded state schools.
14. The Rich Get Hit Harder—But You’re Not Off the Hook
Sure, Labour’s new taxes might hit the wealthy hardest. Non-doms are losing tax breaks and higher capital gains taxes — these are aimed squarely at the rich. But remember, when the wealthy tighten their belts, it’s often the rest of us who feel the pinch in the economy.
15. Corporate Tax Burdens Passed Down
Labour wants to clamp down on corporate tax loopholes, but businesses rarely eat these costs. Expect higher prices, fewer jobs, or both as companies pass the burden down to the average consumer.
16. Rising Costs for Homeowners
Labour’s ambitious housing plans might sound great, but someone’s got to pay for those 1.5 million new homes. Higher property taxes and increased building costs—don’t be shocked when those costs trickle down to homeowners and buyers alike.
17. Small Business Struggles
Higher wages, increased taxes, and more regulations could make it tougher for small businesses to survive. And when small businesses struggle, it’s the local economy—and your wallet—that suffers.
18. Energy Efficiency Standards: Who’s Paying?
Labour’s push for energy efficiency might cut bills eventually, but in the meantime, landlords will need to make costly upgrades. Guess who’ll end up footing the bill through higher rents? Yep—you.
19. The Cost of Clean Energy
Labour’s clean energy goals are commendable, but transitioning to renewables is expensive. Don’t be surprised when these green dreams lead to higher taxes or energy prices.
20. The Cost of Uncertainty
Lastly, the biggest hit to your finances might come from the uncertainty Labour’s plans create. Markets don’t like unpredictability, and neither does your retirement fund. Keep an eye on how the economy reacts because uncertainty often equals higher costs.
Cough Up
Labour’s big promises come with a price tag, and while they claim to target the rich, the truth is, their policies could leave you with less in your pocket. From taxes to rising costs in everyday essentials, there’s plenty to be wary of. Remember, it’s not just the millionaires who’ll be paying more—it’s all of us.
Featured Image Credit: Shutterstock / Fred Duval.
For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.
The images used are for illustrative purposes only and may not represent the actual people or places mentioned in the article.