Nervous about Burnham? How to stay grounded during periods of political change (and the benefits of advice)

From his weekly TikTok updates to his disposal of the prime ministerial podium, Andy Burnham has certainly made waves as a prime minister determined to do things differently from his predecessors.

Despite announcing a variety of bold changes as soon as he took office, there is still a degree of uncertainty hanging over his economic policies, especially when it comes to potential tax rises.

If you’re feeling nervous about Burnham and what his leadership could mean for your wealth, keep reading to learn why it’s important to stay calm in the face of political change, and how we can help keep your financial plan on track.

There is uncertainty surrounding how Burnham plans to fund his economic policies

Burnham has been decisive when it comes to policymaking. Since his appointment on 20 July, he has announced:

• The establishment of “No 10 North” to decentralise power from Westminster
• The biggest council house building programme since the post-war period
• A pledge to end rough sleeping before Christmas 2026.

Burnham has also vowed to give Brits more “breathing space” in their budgets. He has made steps to accomplish this by cutting VAT from electricity bills and capping bus fares at £2.

These policies aim to reduce the burden of the cost of living felt across the country. However, there are questions about how he will fund these expensive changes.

The Treasury claims his VAT plans will be paid for using funding for the now-scrapped digital ID programme. Yet, the BBC reports that this plan was also unfunded, so will not itself pay for the VAT cut.

Likewise, the Telegraph also claims that his council housing proposal could be short by £8 billion.

Media speculation is rampant regarding the possibility of tax rises

Lack of clarity when it comes to Burnham’s economic policies has led to heavy speculation about what possible tax rises might come into force to close these gaps.

Opinions are mixed. Some are confident that Burnham’s criticisms of Stamp Duty and Council Tax will lead to the introduction of a replacement property tax. However, Burnham has stated that there are no immediate plans to abolish them.

Others are steadfast that rates for Capital Gains Tax (CGT) will be increased in line with Income Tax, or that a wealth tax will soon be on the cards.

Despite this conjecture, it’s important to remember that no tax rises have been confirmed since Burnham became prime minister.

Listening to media noise can encourage knee-jerk reactions rather than logical decision-making

Media noise is part and parcel of everyday life.

But when headlines get too loud, they can make reality seem worse than it is. In the case of Burnham, you might feel as if you need to start reacting to policies before they are announced.

If you make a decision based on an emotional or knee-jerk response rather than reason, it might put your long-term objectives at risk.

For example, in the run-up to the October 2024 budget, concerns were raised over the 25% pension tax-free lump sum and whether it would be lowered to help close the “£22 billion black hole” in the public finances.

This fear was intensified by strong media speculation, and MoneyAge reports that pension withdrawals ended up more than doubling in October compared with the same period in 2023.

In the end, the tax-free lump sum was left alone. Yet those who had withdrawn their lump sums early could not renege on this decision, meaning that they could have missed out on possible growth if they had otherwise kept this amount invested.

Focusing on the “what-ifs” can distract you from the changes that will impact your wealth

It’s important to be aware of what might happen in the future when it comes to your personal finances.

But when you spend too much time focusing on “what-ifs”, it can distract you from real obstacles impacting your wealth.

For example, from April 2027, unused pensions will be included as part of the estate for Inheritance Tax (IHT) purposes. If you are relying on passing on wealth using your pension, this new rule may increase your tax liability, unless you opt for alternative strategies like lifetime gifting.

Read more: Lifetime gifting: How to decide what, when, and who

Additionally, the Cash ISA allowance is reducing from £20,000 to £12,000 for under 65s, and a 22% tax will also be applied to interest earned on cash held in Stocks and Shares ISAs.

Read more: The Cash ISA is changing in 2027. Here’s how to make the most of yours now

These changes are confirmed and fast approaching, and will require considerable planning to mitigate. As such, it’s best to focus on preparing for these tangible problems, rather than reacting to media speculation.

A financial adviser keeps an eye on changes impacting your wealth so you don’t have to

It’s natural to be nervous about what a new prime minister means for your wealth. Indeed, this feeling has been all too common in the last decade.

The value in having a financial adviser is that we stay alert to the changes that may impact your wealth so you don’t have to.

We will highlight any policy that is set to affect you and outline strategies to help mitigate its impact on your financial plan.

Likewise, if you are at risk of making an emotional decision based on something you’ve heard in the news, your adviser is your sounding board for any problems you think might be on the horizon for your wealth.

Learn more about how your Caliber financial adviser can help support you during political uncertainty by emailing contact@caliberfm.co.uk or calling 01525 375286 to speak to one of our team today.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.