General election 2024: poll reveals key policy battlegrounds for investors

• Consistency in pension policy emerged as the standout desire from investors, cited by more than six in 10 (62%) of respondents to poll of 1,000
• Regardless of what might happen, taking full advantage of tax allowances and reliefs is a wise strategy.

As Britons prepare to go the polls this week, interactive investor, the UK’s second-largest investment platform, explores the policy battlegrounds that matter most to investors and what to look for from the new government when it comes to personal finances.

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Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “Whatever the result of the general election, the newly elected government is set to have a huge influence on your wealth.

“It is difficult to know how to broach personal finance amid political uncertainty. It is important to remember that manifesto promises aren’t set in stone. Manifestos offer a glimpse of a party’s vision for governing, but various factors, such as the size of a governing majority, economic shocks, and geopolitical events, will determine whether the policies see the light of day.

“The fate of a number of policies, including the British ISA and ‘pot for life’ pension, remain up in the air – and there is always scope for changes that could be beneficial or detrimental to personal finances. Regardless of what might happen, it is wise to take full advantage of tax allowances and reliefs if you can afford to.”

Which finance policy is important to Britons this general election?

Consistency in pension policy emerged as the standout desire from investors, cited by over six in 10 (62%) of respondents to a poll of 1,000 visitors to interactive investor’s website on 17 June 2024. Specifically, an unchanged pension tax system is clearly important to investors, cited by over a quarter (27%) of the sample from a choice of seven financial policy areas, followed by maintaining the state pension triple lock (23%). Lifetime Allowances reassurances was cited by another 12% of the sample.

Tax cuts also ranked high with investors (21%), ahead of British ISA (10%), help for home buyers (7%), while only 1% of the sample cited the retail sale of NatWest shares.

Which issues will have the biggest impact on the way people vote?

When it comes to the issues that will have the biggest impact on the way people vote, some 57% believed that financial matters rank highest for this election, although some areas of the landscape are clearly more important than others. Almost a third (29%) put the economy highest from a list of nine options, and some 22% chose tax.

Investors also flagged immigration and health as their main policy concern, gathering 19% and 14% of the vote, respectively, whereas education, crime and housing received just 2% each.

Myron Jobson says: “Pension policy is emerging as a key battleground. The majority of respondents to our survey value consistency in the pension regime over change. Planning for retirement is difficult when key pension policy, like the triple lock, has seemingly become political football. We need a public confidence boost in state and private pensions, rather than erosion.”

“Good pension outcomes are reliant on a state pension to provide a basic income, along with workplace and private pensions, boosted by pension tax relief. The integrity of these three areas is crucial to rebuilding confidence and catalysing a savings culture in an ever-changing world.”

Alice Guy, Head of Pensions and Savings, interactive investor says: “It’s great news for pensioners that both the main parties plan to maintain the state pension triple lock, which will boost pensioner incomes in the future. But there’s less certainty when it comes to private pension policy and anxiety about possible future changes is reflected in our poll results.

“For pension savers, and that’s most of us, future pensions tax policy could make a huge difference to our retirement wealth. Pension tax might seem boring but it’s hugely important for retirement savings, with pensions tax relief giving a massive boost to our savings.”

“Saving for retirement is a marathon and changing the rules halfway through the race is a big worry for pension savers. It takes many years to build enough for retirement and it’s vitally important that any future changes boost, rather than undermine, the attractiveness of the pension system.”

Tax

Myron Jobson says: “Both major parties have ruled out increasing the rate of major taxes but we are still on course for the biggest tax burden in generations. This is because both parties have said a freeze on tax thresholds will remain for three years if they win the election. The freeze in tax thresholds will claw more of our income into the taxman’s coffers as earnings increase over time. Known as fiscal drag, it is a sneaky tax grab that is set to hit those in the lowest income brackets the hardest.”

Capital gains tax thresholds have already been cut during the past few years. An investor making a £10,000 gain will now pay £1,400 tax if they are a higher-rate taxpayer and £700 if they are a basic-rate taxpayer, compared to zero just two years ago. This makes protecting your investments from tax inside an ISA or pension even more important.

Alice Guy says: “Investors have borne the brunt of tax rises in the past couple of years, with the capital gains' tax bill ballooning and expected to grow more in the next few years. With thresholds cut to the bone, it’s not surprising that investors will be looking at tax policy as they cast their votes this week.”