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2024 General Election

Labour vs Conservatives – what are they promising for young people?

With the 2024 General Election result just one week away, we look at what Labour and Conservatives are promising young people.
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Important information - This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

18-34 year olds are the least likely to vote in a General Election, but there’s been a rise in enthusiasm recently.

Just before the register to vote deadline, a surge of young people signed up to help decide who will be next in Number 10.

Here’s what the main political parties have offered up for younger people, and what it could mean for you.

This article isn’t personal advice. ISA and tax rules can change and any benefits depend on individual circumstances. If you’re not sure what’s right for your circumstances, ask for financial advice.

Tax cuts and frozen bands

In a recent survey*, we asked people about which policies would most likely to attract their vote.

Cutting income tax was a popular option with just over one in five of those aged 18-34. So, the National Insurance (NI) 2p cut on offer from the Conservatives could make a difference.

Unfortunately, Labour nor the Conservatives have pledged to alter the frozen income tax thresholds, meaning they’re highly likely to stay.

As a result, more people over time will be pushed into paying more income tax as they get pay rises, called fiscal drag.

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Around 20% of younger voters are also keen on cutting council tax rates. While neither of the main parties offered this up in their manifestos, both have now ruled out changing rate bands and the Conservatives have promised no changes to discounts.

These discounts benefit students, so this will be welcome news for some younger people.

But those who’ve finished their studies and living alone, they’ll still be paying three quarters of the council tax of a couple living together.

Childcare, rents and getting on the property ladder

Further help with childcare was also a popular policy for 18-34 year olds with 21% of those asked placing it as a priority, and both the main parties have made pledges.

The Conservatives have emphasised the continued roll-out of free childcare for children aged nine months and over. But this is likely to remain in place regardless of who’s elected, because it’s been factored into the current costings.

Labour’s also promising free breakfast clubs in all primary schools – for all children.

Both the main parties have also pledged to support the rights of renters through new laws, including banning no-fault evictions. They’re also pledging to help people onto the property ladder – although in different ways.

Both parties are promising to build more homes, and both have pledged to continue the mortgage guarantee scheme.

But the Conservatives have gone further.

They’ve suggested cutting stamp duty on homes costing up to £425,000 for first-time buyers and introducing a new Help-to-Buy equity loan scheme – offering up to 20% towards the cost of a new-build home. They also want a temporary two-year capital gains tax holiday for landlords who sell to tenants.

But neither of the main parties mentioned the Lifetime ISA (LISA) in their manifestos.

A LISA offers a vital leg-up onto the property ladder. For every £4 you put in, the government will give you £1 on top.

You can contribute up to £4,000 a year to a LISA as part of your £20,000 ISA allowance, getting up to £1,000 from the government each year. That’s a 25% return without doing anything else.

You need to be 18-39 years old to open one, but you can still pay in and get the bonus until you turn 50.

You can withdraw money from a LISA to buy a qualifying first home, or for later life after age 60. Other withdrawals will usually mean a 25% government charge, so you could get back less than you put in.

You also need to have a LISA open for at least 12 months before you can use it to buy a first home without a penalty. So, opening one sooner than later could be better if you’re looking to buy a house in the next few years.

While housing was high on the young people agenda, the policy our survey said would be most likely to make younger people vote for a party was better support from state benefits.

So far, neither of the main parties are committing to more generous payments. Both are pledging reform, designed to get more people into work.

However, as part of that reform, the Conservatives are suggesting cuts of £12bn a year to money spent on welfare.

*Figures are from a survey of 2,000 people by Opinium for Hargreaves Lansdown in April 2024.

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Written by
Sarah Coles
Sarah Coles
Head of Personal Finance

Sarah provides insight and analysis to the media on topics such as savings and financial planning, and co-presents HL's ‘Switch Your Money On' podcast.

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Article history
Published: 28th June 2024