Today sees the end of the Conservative Party Conference, an event which featured a number of financial pledges in preparation for the general election next May.
With the various political parties already jostling for position ahead of the election, here are 5 Conservative Party Conference financial pledges you need to know.
1 – Tax-free personal allowance up to £12,500
In a move designed to take around one million people out of paying any income tax at all, David Cameron promised in his speech today the personal allowance for income tax would rise to £12,500.
This of course assumes the Conservatives win a majority at the election next year.
It would mean someone earning the minimum wage and working a 30 hour week would pay no income tax, Cameron told delegates during his closing speech at the Conference.
2 – £50,000 threshold for higher rate income tax
In the same speech, Cameron pledge to increase the threshold at which people start paying higher rate income tax at 40% to £50,000 from its current level of £41,900.
Such a move would result in more people paying basic rate instead of higher rate income tax on their earnings, and hold back the number of people drifting into the higher rate tax band due to wage inflation.
Cameron said: “The 40p tax rate was only supposed to be paid by the most well-off people in our country but in the past couple of decades, far too many have been dragged into it: teachers, police officers.”
3 – No reduction to pension tax relief
Speaking a fringe event yesterday morning, Financial Secretary to the Treasury David Gauke MP ruled out equalising pensions tax relief at a lower level, as had previously been proposed by the Liberal Democrats.
His comments suggested he believes the Government had done enough to cut tax relief on pensions for higher earners, with the reduction in the lifetime allowance from £1.8m to £1.5m and cutting the annual allowance from £50,000 to £40,000.
4 – Discount house prices for first-time buyers
Another promise from David Cameron was to introduce a scheme to give first-time buyers under the age of 40 a discount of 20% on their first home.
This measure was announced as part of a package to build 100,000 starter homes on brownfield sites.
These would be 20% cheaper than comparable properties because they would be exempt from certain taxes and green targets, as well as the Section 106 agreements requiring house builders to include a specific number of affordable houses or invest in the infrastructure of local communities.
5 -Abolishing the 55% pension death tax
The Conference kicked off with a big announcement for those with pension savings as George Osborne explained pensions would no longer be subject to the pension death tax of 55%.
Learn more at Goodbye pension death tax
This currently applies to people who have reached their 75th birthday and have defined contribution pension savings, as well as income drawdown for pensioners from age 55.
The abolition of the 55% pension death tax will apply when benefits are taken from next April and beneficiaries will instead pay income tax on the proceeds in some cases.
