King’s Speech: Signals for personal finances risk being overtaken by politics

Charlotte Kennedy, Chartered Financial Planner at Rathbones, has weighed in on today’s King’s Speech, and the impact she expects it to have on finances.

The King’s Speech isn’t a Budget, so it won’t change your finances overnight. What it does do is signal where ministers want to focus – from housing to welfare and work. But this year’s speech comes with a caveat. It has been overshadowed by serious questions over the prime minister’s future after hefty local election losses, making today’s agenda look fragile. Any change at the top could leave large parts of it redundant, with a new leader likely to pursue a different course.

For households, the most relevant announcements were around the cost of living, housing and energy bills. The King’s Speech signalled plans to reform leaseholds and cap ground rents, speed up remediation for people living in homes with unsafe cladding, and pursue greater energy independence through renewables and nuclear power in an attempt to protect long-term living standards. There was also a strong emphasis on infrastructure investment, employment support and economic stability, all of which are intended to support growth and ease pressure on household finances over time.

Whether or not these plans ever make it into law, the key for individuals is not to overreact. Trying to pre-empt potential policy changes can do more harm than good. We saw that after last year’s Budget, when speculation about restrictions to tax free pension lump sums prompted some people to rush into withdrawals. That knee jerk response risks missing out on long term investment growth and can create unnecessary tax liabilities.

Decisions should still be driven by long term goals, tax allowances and careful planning – not political headlines. Any real impact on household finances is more likely to emerge at the next fiscal event, not from today’s speech.”