Your money and the General Election

With the General Election just around the corner, we hit the streets of Manchester to find out whether personal finance issues will affect the way people will vote...

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Click here for a full comparison of how the party manifestos will affect your finances

Felicity King-Evans: How important are money issues to you in this General Election? In a recent moneysupermarket.com poll, almost 83% of respondents said that financial and economic issues are definitely going to influence how they vote.

So I’ve come to Manchester city centre to see exactly what kind of issues really matter to people on the street.

Vox Pop: “I think the most important thing is to make sure that the banks are regulated properly , to ensure that lessons are learnt from the past, I think that’s very important. Another thing that does need to be done is you do need to encourage people to borrow less, to save more and to make sure that people don’t get in so much personal debt”.

FKE: Well there’s no doubt about it that this recession has been particularly hard on people with high levels of personal debt, so what do the different political parties have planned?

Well, the Lib Dems say that they would set a limit on the amount that credit card companies can charge in interest. They also say that they would curb the amount banks and building societies can charge you if you go overdrawn without permission, or if a direct debit fails, that kind of thing.

The Conservatives say that they would scrap the FSA completely in favour of a new consumer protection agency, which they say would win a fairer deal for customers. They want to cap what they call ‘excessive’ store card rates and also demand that credit card companies give customers more information, make things clearer for them.

Labour say that they would also create a new regulator for consumer finance, and as government they recently gave borrowers five new rights, including the right to say no to hikes in interest rates or hikes in your credit limit.

Vox Pop: “Well, somebody who is going to look after the housing market and the banking crisis – stuff like that – and I think anyone who gives more to the man in the street, like tax breaks – stuff like that – that’s what really appeals to me. I don’t like this national insurance increase”.

FKE: Well tax is a huge issue in every general election, but probably never more so than in this one.

Labour says that it’s going to increase the personal tax allowance, which will save people money, but it also plans to raise National Insurance contributions, which will cost both employers and employees more. It’s also said it won’t hike VAT.

Well the Conservatives are hugely against the potential rise in NI – they’re calling it a tax on jobs. David Cameron has said there are no plans at the moment to raise VAT, but some people speculate that they’ll need to simply because they’re not planning to raise NI. They’re also planning to raise the threshold of inheritance tax from £325,000 to £1 million pounds.

The Lib Dems say that they will cut income tax for low earners and they’ve pledged no VAT hike, but as of yet they haven’t come and said what their position on NI is.

Vox Pop: “Being 60 years old now, and having had most of my pensions and savings removed over the last few years, I’m trying to find a way of finding a good place for my savings really”.

FKE: Well pensions are a real hot topic in this election debate. Many people are really worried about how they are going to afford their retirement. So what do the different parties have planned?

Well, the Conservatives say they are going to end the obligation to buy an annuity at the age of 75; they also plan to link state pension to earnings as soon as it becomes affordable.

Labour say they will also link state pension to earnings, and they aim to do that by the year 2012. In addition, people earning £130,000 or more a year are going to have limited pension tax relief from next year. 

The Lib Dems, meanwhile, say that they would immediately re-link state pension to earning. They also plan to create a citizens pension - one that’s based on residency rather then NI contributions.

Vox Pop: “Banks and politicians should release the money for young couples to buy cheaper end of the properties and to be able to get themselves onto the property market [which will] release properties so that other people can buy larger homes who have got a larger family now. At the moment people are stalemated and nobody is able to move”.

FKE: Well, the Labour government has already put in place a stamp duty holiday for first time buyers. For the next two years they can buy a property worth up to £250,000 pounds without having to pay any stamp duty tax. In the same budget report, Alistair Darling announced a rather more permanent change - properties worth £1million or more will now be subject to 5% stamp duty instead of the current 4%.

The Conservatives – by and large – agree with that - they want to make the stamp duty holiday permanent for first time buyers, and they also are happy with the increase in stamp duty for properties worth a million pounds or above. They also want to scrap Home Information Packs (HIPS) which they say are a waste of money and an unnecessary cost.

The Liberal Democrats mean while want to levy a mansion tax. If they win power then every home worth £2million or more will have to pay an annual fee of 1% of the value of their property.

“I’m going to vote Labour this time, well I’ve always voted Labour so I’m going to continue to do that.”

“I like to vote Liberal but I’m mainly a labour voter but there is not much difference between Labour and Conservative.”

“I’m favouring towards the Conservatives as having a better alternative to what’s we’ve had over the last 10 or 11 years but its difficult to say.”

“Well, I don’t know much about it…Yeah, we’re not sure if we’re even gonna vote.”

FKE: We’ve heard lots of interesting opinions from people today, but what you haven’t seen is that a huge number of people were simply walking away from us, saying they’re not going to vote, or they don’t really want to talk about the election.

What does this mean for the political parties? We’ll have to wait until May to find out.

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