The polls predicted a close finish for the 2017 snap election but the actual outcome has still come as quite a shock. Now that the results are in, and the hung parliament looks most likely to result in a Tory minority Government – propped up somewhat precariously by the DUP – many householders will be wondering how the Conservative policies will be redefined should Theresa May retain power and what the UK’s political uncertainty means for their own future.
Here we take a look at the policies most likely to affect your monthly budget and in particular those relating to energy bills, which account for a sizeable chunk of the average household’s outgoings each month.
Effects on the working family’s budget
Some good news first: If our new minority Government lasts beyond the confidence vote from parliament on 19th June, the central policies of the Tory manifesto are likely to be the ones they push through first and this includes a promise to raise the Personal Allowance from £11,500 to £12,500 – which will mean that working families get to keep a little more of their monthly income before tax. No one earning less than £12,500 will pay tax on their earnings. However, whilst this could make a difference to some low-income households, no further assurances are offered when it comes to National Insurance (which must be paid by all working adults) or Income tax. The failure to continue the increase freeze on NI and Income Tax could potentially mean extra costs for the average wage-earner in the years to come, as only VAT is protected from rises if the Tories keep their promises. Despite assurances of a ‘firm intention’ to cut tax from Theresa May in the run up to the election, bill payers would do well to find ways to guard themselves from a potential extra strain on their budget.
Pension concerns for the future
Looking longer term – if the UK stabilises under a Conservative Government, pensions will unfortunately no longer be preserved under the current ‘triple-lock’ system, which is set to be reduced to a ‘double-lock’ system by 2020. What this essentially means is that older people will eventually see smaller annual price rises; falling below the current minimum of 2.5%. This, combined with a means tested fuel allowance, could make a difference to the monthly outgoings of many pension-age householders and mean that they need to take a fresh look at their finances, seeking out extra ways to cut costs. All of this would change should Labour manage to put forward plans for their own minority Government and win the confidence vote next week. Under Labour, the triple lock would be protected and the fuel allowance would remain intact. However, this scenario currently seems unlikely.
Stay savvy on energy
Both Labour and the Conservatives outlined plans to control energy prices in their manifestos. The Tories have pledged to introduce a ‘safeguard tariff cap’, which will cap the cost of Standard Variable Tariffs – the type of tariff which the vast majority of households are on. Industry experts are predicting that this cap could still happen relatively quickly, despite the uncertainty caused by the hung parliament. If the predictions prove to be correct, a price cap could certainly save many energy users some money on their bills each year.
However, it will remain the case that the Standard Variable Tariff won’t usually offer customers the best deal on their energy prices. Nor will it ensure that customers secure the high-quality service they deserve. It won’t pay to be complacent, even with an energy price cap in place, as household bills for people of all ages and occupations remain likely to rise over the next few years – particularly now that investment in our energy system is likely to be delayed while investors wait to see what happens to our nation’s energy and environmental policies. Switching energy provider and proactively choosing the best tariff for your needs currently remains the only sure-fire way to save money on your bills each month.
We make saving on energy simple
Both potential Government leaders have promised to make switching your energy provider easier. How and when either would follow up on this promise remains to be seen, but for the time being customers across the UK do have options for hassle-free switching – and this doesn’t have to mean using an online only service. Don’t Waste Money are here to help you make the switch and can advise you on the best deals available over the phone or in the comfort of your own home. We’ll explain your contract options in simple terms and will never push you into making a change before you’re ready.
With an uncertain time ahead and with policy changes and Brexit sure to have an effect on the money we all have in our pockets, we can help you to secure 12 and 24 month fixed price deals on your energy – so you’ll have one less thing to worry about.
If you’d like a visit from one of our team, please get in touch today. Just call 0121 374 0085 or send us a message.