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Election 2024

What are the parties’ plans for benefits and taxes?

Published on 24 June 2024

Use our simple interactive tool to see how the parties’ plans for benefits and taxes would impact household incomes over the next five years.

Use our simple interactive tool to see how the parties’ plans for benefits and taxes would impact household incomes over the next five years.

The Conservatives, Labour and the Liberal Democrats all have very different plans for taxes and benefits over the next five years. This tool allows you to analyse how their plans would affect households across the income distribution, and different types of families. All these numbers include manifesto policies as well as existing planned policy changes that the parties have not announced any deviation from (most notably three more years of tax threshold freezes).

This tool only analyses the distributional effects of changes to taxes and benefits on household income. Other planned tax changes, such as to fuel duties, are not modelled. But the column on the far right of the first chart includes the amount of income all the additional taxes, not otherwise modelled, take on average per household.

See the drop-down below for more information on precisely what is included in this analysis.

Click here to download the data.

Instructions

The first chart in this tool shows how planned tax and benefit reforms will affect incomes for each decile (tenth) of the income distribution. The second chart shows the same, but for different demographic groups instead.

Use the arrows to choose whether to show these results in cash terms (2024 prices) or as a percentage of current income.

Use the dropdown to choose which groups you want to compare. In the first chart, you can show results for different deciles (tenths) of the income distribution, across the whole population or depending on age or work status (some data points omitted due to low sample size). In the second chart, you can also compare other family types, age groups and regions.

In general, this tool only analyses the effects of changes to benefits and changes to taxes on household income. Changes to consumption taxes, such as duties and VAT, or business taxes are not included in most of these results. The results are based on tax liabilities and benefit entitlements. They do not take account of the fact that some households will not claim benefits to which they are entitled, or pay all the tax to which they are liable. The results also do not take account of how households might change their behaviour in response to these policies.

Below, you can find a list of policies included for each party in the main analysis.

Current plans modelled (also included in all the lines for the parties’ plans except where they plan to deviate)

Three more years of freezes to income tax and National Insurance thresholds.
All permanent freezes to tax and benefit rates and thresholds, e.g. by default the point at which the income tax personal allowance begins to be withdrawn is frozen in cash terms (at £100,000).
Above-inflation uprating of the state pension and pension credit.
Continued roll-out of the two-child limit on benefits for families with children, and removal of the family premium.

Conservative policies modelled

2p cut to employee National Insurance contributions.
Abolition of self-employed National Insurance contributions.
“Triple lock plus” above-inflation uprating of pensioner personal allowance.
Move to household tapering of child benefits between combined earnings of £120,000 and £160,000.
£12 billion of cuts to welfare – note there is limited detail available on exactly how these cuts will be implemented, but the implication is that they will be driven by disability benefits. Here we assume all the cuts are achieved by reducing the disability benefit caseload. Since it is not clear what policy the party plans, we have also included a separate series excluding disability benefit changes (“excluding PIP/DLA cuts”).

Labour policies modelled

None additional to current plans.

Note that planned changes to carried interest rules affecting private equity bosses (around 3,000 people) are not included, though these could be implemented as a change to income tax.

Liberal Democrat policies modelled

Abolition of the two-child limit.
Abolition of the benefit cap.
Abolition of the under-occupancy charge (also known as the bedroom tax).
Giving the full standard allowance of universal credit to young parents.
Increasing the carer’s allowance by £20 per week.

Note that the plans to change the earnings rules for carer’s allowance eligibility and increase child benefit for 1-year-olds are not included due to modelling limitations and lack of detail.

All taxes

To illustrate the scale of the tax rises that do not directly target household income, the rightmost column in the first chart also includes the average revenue raised from these per household. They include the currently planned increase in fuel duty and other smaller tax changes, as well as the various parties’ plans on VAT, tax avoidance and evasion, business taxes and other policies.