What the general election might mean for your finances

The dust has now settled on last month’s shock announcement by Theresa May that the UK would once again go to the polls on June 8th for a general election, leaving lots of us questioning what this might mean for us in reality. One area of concern for many will no doubt be what the general election could mean for personal finances. To help answer some of your unanswered questions, here’s our roundup of what an election might mean for your money.

Summer holidays

If Brexit taught us anything, it’s that what’s going on in our country can dramatically affect how far our money will go when we travel to another. This is basically because the more uncertain our future looks, the weaker the pound gets.

With this logic in mind, for holiday-goers, the timing of the election could arguably have been better. However, following May’s announcement the pound actually strengthened – a trend that could mean a good exchange rate if you’re heading abroad this summer.

Unfortunately, though, there’s no guarantee this state of affairs will continue. It all depends on how the run-up to the election shapes up and what the result ends up being. It’s always best to keep an eye on exchange rates in the run-up to your trip and with the election likely to cause fluctuation, it’s now perhaps more important than ever.

Buying and selling a home

The housing market is experiencing a period of high demand at the moment and research from online estate agent emoov suggests both buyers and sellers are undeterred by the election announcement[1]. When asked “Given the announcement of a snap general election – if you are buying/selling a house will you still go ahead & buy/sell regardless?”, 56.7% of sellers and 59.2% of buyers said yes.

That being said, experts still expect activity to slow in the coming weeks, before bouncing back after the election. Alison Platt, chief executive at estate agent Countrywide, told CityAM: “Analysis of sales transactions over the course of the last nine general elections indicates there will be a dip in activity pre-election.”[2] However, she added that there will be a post-election rise, with the highest levels of sales historically noted in the 3 months following an election.

Spending power

Whether or not the general election causes you to feel a pinch in your pockets depends a lot on the performance of the pound and the outcome of the vote.

Figures from the Office of National Statistics revealed that pocket-pinched Brits are slowing down their spending in general at the moment, as price hikes, inflation and low wage growth continue[3]. The election announcement itself is unlikely to change these things in the short-term, so in reality you’re unlikely to feel a significant financial impact.

Use the election to boost your credit score

If you’re not already on the electoral roll, use the election as a chance to register to vote. Even if you don’t head to the polling stations on June 8th, being on the electoral roll is really important for your credit score. Find out why here.

If you want to vote in the 2017 general election, you need to register by May 22nd.

 

[1] https://www.emoov.co.uk/news/2017/04/19/home-sellers-buyers-undeterred-snap-general-election/

[2] http://www.cityam.com/263083/heres-experts-think-general-election-means-house-prices

[3] https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest