From overhauling pension tax relief to scrapping Help to Buy, the loveMONEY team has put together a list of financial reforms that we think Britain desperately needs. Let us know if you agree.
You’ve no doubt been inundated with hundreds of political leaflets in recent days, promising everything under the sun in the hopes of winning your vote.
But here at loveMONEY we don’t think politicians need to make drastic promises in order to improve our finances.
In fact, there are so many obvious shortfalls in the current system that a few changes could create a fairer system for all of us – and ensure the economy benefits as well.
That’s why we’ve put together the loveMONEY election manifesto.
This isn’t pie-in-the-sky stuff, nor is it a long list of proposed tax hikes that just so happen not to affect us.
On this page, we’ll run through our 11 pledges, with a link through to a more detailed argument for each, should you want more info or to comment on a specific issue.
And one final point before we delve in: we’re obviously not a political site. We don’t advocate one party over another.
Our manifesto simply calls for finance to be fairer, more efficient and sustainable.
1. Reform pension tax relief to create a fairer system
It’s great that we get tax relief on our pension contributions.
There is no doubt that, as a nation, we simply aren’t saving anywhere near enough to cover our living costs in retirement, and this tax relief is an enormous selling point to pension contributions.
But let’s be honest; the current system isn’t fair.
Why on earth is the level of tax relief determined by our Income Tax band?
Why does HMRC hand over millions of pounds a year giving higher and additional rate taxpayers’ pensions an even bigger boost than basic rate taxpayers?
The Government is right to give pension contributions a boost. But that boost should be the same across the board, rather than unfairly weighted towards the best off.
Want to know more? Read our detailed pension tax relief pledge here.
2. Scrap the State Pension triple lock
Any change that could hit pensioner income is always going to be hugely contentious.
However, we believe the case for scrapping the triple lock on State Pensions from 2020 is strong enough that we are willing to risk public anger by advocating it.
You can read our far more detailed argument here, but the key points are that is was always meant to be a temporary measure, it will have more than served its purpose by 2020 and, finally, the costs will rapidly snowball if we don’t switch to a double lock system.
3. Introduce an inflation-linked savings product
One of the hardest hit groups since the financial crash all those years ago has been savers. Pre-crash, accounts paying in excess of 6% were commonplace. These days you have to promise to lock your money away until the next election rolls round just to get a 2% rate.
The Government’s solution was to offer an NS&I bond paying 2.2% (with a flimsy £3,000 limit) earlier this year.
But, with inflation currently at 2.7% and expected to smash through the 3% barrier this year, it’s fair to say the NS&I bond will do little to ease savers’ woes.
So why not introduce an inflation-linked account with a more generous savings limit? Seems logical to us.
4. Give councils more power to reclaim empty homes
During election campaigning, politicians of all persuasions are pledging to bring an end to the housing crisis.
They all intend to employ slightly different mechanisms, but the underlying aspiration is the same: they want to build hundreds of thousands of new homes.
It’s a laudable aim, but it’s a flawed one: building new homes is harder than it sounds, takes longer than anyone would think – and overlooks a far simpler way to boost housing supply.
But a better solution would be to give councils more power to reclaim all the empty ones. Here's why we think it would work.
5. Scrap Help to Buy
While we’re on the topic of housing, how about we stop focusing on initiatives that only serve to fuel demand, rather than supply.
For many years now the Government has responded to soaring house prices and frustrated, priced-out first-time buyers by offering the same solution: help reaching those prices.
This is a ridiculous and self-defeating way of supporting the next generation of buyers, and it should be scrapped in favour of more practical, less inflationary solutions to our property problems.
So let’s scrap Help to Buy and pump the money into these schemes that will help solve the housing crisis.
6. Combine NI and Income Tax
Merging National Insurance and Income Tax will not only save money, it’ll also create a more honest system. Here’s our case for making this long overdue change.
The only question is, will any politician have the guts to implement it?
7. Review Council Tax bands
When Council Tax was rolled out 25 years ago, the bands were hastily put together.
As property values have changed, the system is now completely unfit for purpose.
Yes, there will be winners and losers, but revising Council Tax bands will undoubtedly ensure people pay a fairer share. Here's why we think so.
8. Reform Stamp Duty on pricier homes
Another area that could do with reform is Stamp Duty.
George Osborne should be commended for scrapping the illogical slab threshold that was in place. However, we think the decision to hammer higher value homes (at least 10% on homes worth more than £925,000) are actually stifling the market and putting people off moving.
We agree the wealthier should pay their fair share, but there are better ways to go about it. Read more about how we'd change Stamp Duty.
9. Subsidise childcare far more heavily
Politicians want mothers and fathers to return to work if they can, but they make it almost impossible for two parents to work.
Childcare costs regularly exceed the monthly rent or mortgage, yet working parents and early years education for kids has been shown to improve outcomes for everyone.
The payoff to society would be great – and the more we encourage parents back into employment, the more tax they contribute back into the system. Here's our argument for increasing childcare subsidies.
10. Scrap the unfair Marriage Allowance
The idea of the Marriage Allowance is that it allows one partner to pass on some of their personal allowance – the amount you can earn before you have to pay tax – to the other partner.
The idea that the Government can put in place a financial incentive, no matter how small, which rewards people for pursuing a certain type of relationship is unfair.
Why on earth should someone who has been married for six months qualify for a tax break that isn’t open to people who have been in a relationship for decades, without ever getting married or entering a civil partnership?
Here's why it's time for it to go.
11. Introduce student loans with flat-rate interest
Students are being punished with outrageously high loan debts, and they're made even worse with compounding interest.
We want to bring in student loans with a simple, flat-rate of interest.
So, there you have it: our 11-point financial manifesto. What do you think? Any areas you strongly disagree with, or any obvious omissions? Let us know in the comments section below.