Labour’s Financial Plans: What to Expect Under Chancellor Rachel Reeves

Labour’s Return to Power: What Does it Mean for Your Money?

Labour is back in government for the first time since 2010, with Chancellor Rachel Reeves at the helm. With promises to keep the state pension triple lock, cut energy bills, and avoid hiking personal taxes, there are high expectations for how Labour will manage the country’s finances.

### What Does Labour Say About Personal Taxes?

Labour has pledged not to increase income tax, National Insurance, or VAT. Instead, they plan to make the tax system fairer by targeting wealthy non-domiciles and implementing a windfall tax on energy companies’ profits. They also aim to introduce a “fiscal lock” to ensure responsible spending and tax plans.

However, Labour has not made any promises regarding capital gains tax or inheritance tax, leaving room for potential increases in the future to boost revenue.

### What Does Labour Say About Reducing Energy Costs?

Labour’s plan to reduce household energy bills by up to £1,400 a year involves creating a publicly owned energy company called Great British Energy. They also aim to offer grants and low-interest loans for home upgrades, such as insulation and solar panels, through a Warm Homes Plan.

### What Does Labour Say About Housing?

For first-time buyers, Labour plans to introduce a permanent mortgage guarantee scheme called ‘Freedom to Buy’ and reform planning rules to enable the construction of 1.5 million new homes. They also aim to keep mortgage rates low for homeowners.

### What Does Labour Say About Wages?

Labour wants to increase the hourly minimum wage to a genuine living wage and remove age bands to ensure all adults receive the same minimum wage. This could result in significant pay increases for workers, especially those under 21.

### What Does Labour Say About Pensions?

Labour has committed to reviewing the pensions landscape and keeping the state pension triple lock. However, experts caution that past pension reform ideas have not been successful, so savers should not rely on government changes to secure their retirement.

### What Does Labour Say About Childcare?

Labour plans to continue expanding free childcare for children under five, fund free breakfast clubs in primary schools, and reduce branded items required by schools. However, childcare advocates believe more reform and investment are needed to create an affordable childcare system.

As the new government prepares to outline its priorities in the King’s Speech, it will be crucial to see how Labour’s manifesto pledges translate into action. Stay tuned for more updates on how Labour’s return to power will impact your finances.