Prospects for savers and investors in 2015


Savers Prospects Blog ImageIs it almost five years since Gordon Brown was Prime Minister? Has it been nearly half a decade since he offended pensioners in Rochdale and announced that he loved the TV show Glee?

Indeed it has, and in the next twelve months we as prospective voters will be wooed with various offers and inducements to vote for an ever growing list of parties in the next general election.

In 2010 the outlook was grim; the Conservative Government offered austerity as a solution to the nation’s deficit and the Labour Party promised roughly similar measures. We had shopped, spent and frittered our way into an epic economic calamity, so we were told, and the economic medicine that would be administered would be bitter.

Four years on and we face a very different set of circumstances. As a nation we’ve done the tough part and since 2008 weathered a longer economic downturn than even the Great Depression of the 1930s.

The economy is booming with inflation low, rising house prices, and growing employment, which means that voters might reasonably expect some kind of reward for their forbearance over the last four years. Also, we as a population are as open to bribes from our elected masters as anyone else.

So what might 2015 have in store for those who take an active interest in their financial futures? Until the manifestos are published and the speeches are made, it’s impossible to say for sure, but we can make a few educated guesses about what each party offers the saver and investor.

The Conservative Party

One of the policies reputed by the Daily Telegraph to have been presented to George Osborne by an influential policy group is the abolishment of a compulsory retirement age.

This change would have a major impact on the pensions industry and would present individual savers with both challenges and opportunities. It is evident to most casual observers that today’s 65 year olds are substantially different from their counterparts thirty or forty years ago, and many still have much to offer the economy.

However, for the policy to have appeal it must present potential retirees with the option to stop work as for many, this is a cherished opportunity to enjoy some of the best years of their lives.

After the recent shake up of the annuities market, some insurers and pension companies might be relishing a postponement of the date when pensioners claim their policies. It might not be beyond the realms of possibility that they offer inducements to later claimers, encouraging retirees to work on for a few years.

The Labour Party

Whilst parts of the nation have complained bitterly about the austerity measures of the last four years, a recent poll shows that voters still hold Labour largely responsible for the financial crisis.

The Labour Party launched a document on its proposed economic policy in March 2014 (far from being anything as concrete as a manifesto) based on a nation wide consultation. Some of it makes for quite interesting reading from a personal finance point of view, though as with all things written by politicians, you have to read between the lines a little.

Labour have pledged to separate retail and investment banking, thus keeping the deposits of ordinary savers a lot safer in the event of another financial crash.

Overall the tone of the document threatens sanctions against ‘casino’ bankers, but there is another element to the document that will be potential welcome news (if it ever happens, that is).

A proposed break up of the big banks, as suggested by Labour, might well introduce fresh competition to the high street and usher in an era of deals that favor the savers and investors. The policy document also pledged to take action against mis-selling scandals, the likes of which have blighted the lives and the finances of savers and investors over the last two decades.

The Liberal Democrats

Also engaged in a nation-wide consultation at the moment are the Liberal Democrats. Their position is complicated by the fact that if they are to wield any influence at all, it will be as part of a coalition government.

This will mean that certain policies affecting personal finance might be endorsed and others quietly dropped.

On the issue of personal finance, savings and pensions, the workplace pension that was introduced last year will, under the Liberals, continue to be rolled out across the UK. This is likely to happen whoever wins the next election; however, there seems to be some commitment to protecting low and middle income pensioners’ incomes, preventing them from falling behind the rest of the population.

Perhaps the most interesting policy, and one echoed by the Conservatives, is that of taking low earners out of income taxation altogether. The party have aspirations to end income tax for those earning £12,500 and under by the year 2020.

Fine Words Indeed…

Most pundits agree that the outcome of the next general election is almost impossible to predict, with opinion polls giving a wide variety of potential outcomes on an almost weekly basis.

It must be stated that at the moment, all such pronouncements by each political party are not election promises by any stretch of the imagination. They are strong indications of what those promises might be, however.

The improvement in the country’s economic fortunes allow some scope for politicians to offer inducements to vote for them and the incumbent chancellor invariably saves his most attractive giveaways for the pre-election budget.

The most recent budget had a range of attractive inducements for savers and investors but the next one it’s suspected, will be a source of glad tidings; One thing that the polls seem to agree on is that in order to get an overall majority in the coming election, the government will need a considerable amount of public goodwill and what better way to get it than to cut taxes and make saving more worthwhile and borrowing easier and cheaper?


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