Andy Burnham has officially replaced Keir Starmer as the UK’s new Prime Minister, making him the seventh person to hold the title in the last decade. But what could this mean for your money? And how does the new PM plan to tackle the cost of living crisis, which has become one of the country’s most pressing social issues? We’ve outlined the key financial changes that could be on the way:
Affordable social housing
In his first speech as PM, Burnham pledged to end rough sleeping and create one of the biggest housebuilding programmes since the post-war period. The drive will be supported by £340m in funding (equivalent to £113m a year) for the construction of 1,200 new homes and intensive support for over 3,000 people. This news has been welcomed by many, with a lack of affordable housing and soaring rents blamed for plunging the UK into a housing crisis in recent years.
Cost of living measures
As well as tackling the housing crisis, Burnham is planning to set out a range of cost of living measures designed to give households some much-needed breathing space. Included in this is a VAT cut on electricity bills from October, in a move that’s intended to give struggling households immediate help ahead of winter. The government claims this will save the typical household £45 a year, which will “put more money in people’s pockets and bring back hope”.
Tax-free personal allowance
The tax-free personal allowance threshold in the UK has been frozen at £12,570 for five years, meaning someone needs to earn £12,570 a year before they have to start paying tax. If the personal allowance threshold is raised, those paying the basic rate of tax would benefit the most. For example, someone earning the average UK salary of £35,000 would save £96 a year, or £134.40 if National Insurance was also lifted.
State pension
Despite being urged to ditch it, Burnham is committed to keeping the state pension triple lock until at least 2029. This guarantee, which has been in place since 2010, ensures the state pension rises each year by whichever is highest: inflation, average earnings growth, or 2.5%. Under the triple lock, pensioners are guaranteed a state pension increase of at least 2.5% each year.
