Keir Starmer will become the next Prime Minister after the Labour Party swept aside the Conservatives in a landslide General Election victory overnight.

With support for the Tories collapsing significantly, Starmer will soon lead the first Labour Government in 14 years with a huge parliamentary majority of 174 seats.

MoneyAge has rounded up some reaction from the industry about what Labour’s victory and Starmer’s new term could mean for the consumer finance sector.

Mortgages

New Homes director at Mortgage Advice Bureau, Mobeen Akram, said that Labour now has an opportunity to “push forward and give the housing sector a much-needed boost”.

“In the first 100 days of Government, we hope to see a number of proposals come into play – most notably, kickstarting the promise to build 1.5 million new homes over the next decade,” Akram said.

“We’re also keen to see the rollout of new affordable house building programmes, as well as a review of greenbelt land, both of which would have a positive impact for prospective and current homeowners. This change in Government offers a prime opportunity to reinvigorate the housing market. It’s now up to Labour to take decisive action and differentiate itself from its predecessors.”

Head of mortgages at Atom bank, Richard Harrison, added: “I’d like to see time given to whoever is appointed Housing Minister, given the way it has been a revolving door in recent years – the outgoing Lee Rowley was the fifteenth housing minister since 2010.

“It will also be interesting to see the detail of the Freedom to Buy permanent mortgage guarantee scheme promised in the Labour Party manifesto, aimed at supporting borrowers with small deposits.

“More than anything, I think the mortgage sector will relish some stability. The ongoing uncertainty of the last few years has taken a toll on borrowers, who today face higher interest rates when their finances are already stretched. Some economic calm, and the prospect of base rate cuts in the months ahead, will be welcome.”

Tax

Head of medical at Wesleyan, Alec Collie, said: “A new Government means there could be some changes when it comes to tax and savings policy. But this might not come immediately. Rachel Reeves has ruled out an emergency budget, so we may need to wait for the Autumn Budget, and probably September at the earliest, before the first concrete announcements are made.

“The pre-election manifesto gives us some flavour of what to expect. Labour has pledged that things like income tax, VAT and national insurance won’t change. However, it may need to have some ability to raise taxes in order to deliver its other commitments. So, there’s a chance we could see changes to wealth-based taxes such as capital gains tax (CGT) or inheritance tax (IHT).”

Director of public policy at AJ Bell, Tom Selby, added: “With a stonking Parliamentary majority, Starmer has a serious mandate to pursue the reforms set out in Labour’s manifesto. The party has been crystal clear throughout the campaign it will prioritise economic growth and ‘wealth creation’ in government, although details of exactly how these will be achieved, or what it might mean for people’s pensions and investments, have been relatively thin on the ground.

“The pledge not to increase National Insurance, income tax or VAT led to feverish speculation of exactly what might be in new Chancellor Rachel Reeves’ fiscal crosshairs, particularly if growth remains as elusive as it has been for the past two decades.

“And if there is a vacuum for speculation about potential revenue raising tax measures, it is inevitable the prospect of a potential pension tax raid will rear its ugly head. It is vital savers and investors ignore the noise ahead of Reeves’ first major fiscal set-piece, likely in September or October, and focus instead on their long-term goals.”

Savings and investments

Selby also suggested that the new Labour Government, with a fresh mandate post-election, will have a “huge opportunity” to deliver lasting reforms for the benefit of savers and investors.

“The fact Labour has committed to ISA simplification is a huge positive, but to deliver genuine benefits to millions of Brits the new Government needs to be radical,” Selby commented.

“As a first step, the next Government should look at merging cash and stocks and shares ISAs, the two main ISA products used by investors.

“This move would make it simpler for investors to shift between cash and investments and move us towards a world where investments are simply a feature of ISAs, rather than a defining characteristic.

“Platforms could then build a more flexible ISA with the ability to move freely between cash and investments – something that would tie in with wider efforts to boost the number of people investing for the long term, including in UK Plc.

“Increasing the overall ISA allowance to £25,000 would help support this agenda without the complexity of the proposed ‘British ISA’, an ill-thought-out policy that should be binned by the new administration.”

Head of strategic client solutions at Russell Investments, David Rae, added: “Starmer and Reeves have very limited room to move. While the UK outlook is beginning to improve, core inflation remains stubbornly high at 3.5%, delaying interest rate cuts by the Bank of England.

“One interesting policy change that could emerge under the new Government is the treatment of the financing gap and losses on quantitative easing (QE) bond sales. With the Bank of England estimating that the QE draw on public finances could exceed £100bn, a change to the treatment of QE losses could create substantial fiscal headroom.

“We see attractive valuations of both UK gilts and UK equities and the beginnings of a more favourable cyclical backdrop. A period of political stability and more considered Government, combined with some global tail winds could give Starmer an easier introduction to his time as Prime Minister.”

Pensions

Pensions director at Aegon UK, Steven Cameron, said that the Labour Government’s promised review of the pensions landscape could have “far-reaching implications” for all aspects of workplace and private pensions.

“With pensions being such an important long-term savings vehicle for millions, changes shouldn’t be rushed,” he said. “However ‘super’ the Labour majority, cross-party support can offer stability and certainty. We need a well-thought-through, logically-sequenced reform agenda, and the pensions industry stands ready to support this.

“Aegon believes the Government’s first priority should be the planned enhancements to workplace pensions auto-enrolment, which have already received cross-party support and would boost pension pots for millions of employees.

“Second, we’d urge Labour to push ahead with the ‘targeted support’ proposals from the FCA and Treasury, offering a new form of much-needed financial help to those unable or unwilling to pay for full financial advice.

“Our third recommendation is implementing pension dashboards. These could be a game-changing way for individuals to track and engage with all of their pensions, and we urge Labour to make sure these go live by the 2026 target date.”

Head of policy at Broadstone, David Brooks, added: “With no mention of the Lifetime Allowance in Labour’s manifesto, we can probably assume it will not continue with previously announced plans to reverse the Conservatives’ abolition of this tax, but further detail will be needed around concluding the small print on its implementation.

“With a Pensions Minister to be appointed and a Kings Speech in just two weeks’ time, policy is likely to move quickly but we broadly expect continuity in the pensions market. There are already significant legislative processes underway which we anticipate will be continued – with the possible exception of the controversial pot for life proposals.”

Social care

Head of savings policy at abrdn, Alastair Black, said: “Social care reform also can’t slip down the list – after pensions, it has to be the single biggest issue creating uncertainty for long-term planning. Currently, there’s a support vacuum that makes it very hard for people to plan with confidence.

“We need to see the Government tackle this difficult, but important, issue head on, and not kick it into the long grass. We’ve already seen the planned social care cap pushed back into 2025.

“Ultimately, we want to see that any and all future policy changes are based on thoughtful reform, built around consensus and with a long-term view in mind. Change can absolutely deliver good outcomes.”

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