New research finds voters willing to prioritise policies that don’t benefit their own finances

01 July 2024

As the nation prepares to go to the polls, new research shows people are willing to prioritise some policy areas which they don’t think will benefit their own finances. The public strongly support investment in public services, even if it means they are taxed more. Twice as many people believe spending on public services should be increased even if it means tax rises for households like theirs (56%), than agreed that taxes should be reduced for households like theirs, even if it meant less spending on public services (24%).

Prospective voters also ranked areas such as cheaper energy tariffs for low-income households and income support for people with disabilities as important for the country, despite not giving their own households a financial advantage. 

The policies that were most likely to be seen as good for the country but not for their household were:
More hours of free childcare (33%)
Raising the rate of tax for higher earners (29%)
Increase in Child Benefit (27%)
Cheaper energy tariffs for lower income households/those on benefits (26%)
Increase in disability-related benefits (25%)
Higher taxes for private schools (25%)

The Financial Fairness Tracker, commissioned by the abrdn Financial Fairness Trust and analysed by a team of researchers at the University of Bristol, has been monitoring household finances since the start of the pandemic. Researchers questioned around 5,600 households about their financial situation as well as policies the next UK government should prioritise.

The last four years have seen a decline in the number of households who are financially secure (a drop of seven percentage points or nearly two million households) and a significant rise amongst those in serious financial difficulties and struggling financially (an increase from 28% to 39%, nearly three million households). Despite the squeeze many have indicated they would vote for policies which are good for the country above those which will benefit their own household situation.

Three times as many households were in favour of policies which allow interest rates to be lowered as they believed it would benefit the country (21%) as those who said the policy would actually benefit just their household (7%).  This likely means that many households with savings, who might see reduced returns if interest rates fall, recognise the pressures that high interest rates put on others; for example, those with mortgages. However, on some areas such as income tax and council tax, voters are swayed by policies which will improve their own financial situation (as well as thinking it would benefit the country).

When asked what policies the next government should prioritise, the most common answer was a reduction in Council Tax (43%). 

Digging deeper, we see differing views on those priorities, depending on income, age, household composition and voting patterns. To some extent, preferences reflected households’ self-interests, though this does not tell the whole story:

• Households on the lowest incomes prioritised cheaper energy tariffs for those on lower incomes or receiving benefits (42%), then Council Tax reductions (35%) and an increase in benefits for those out of work or on lower incomes (33%).
• Younger adults and those with children in the household were disproportionately likely to select more hours of free childcare, an increase in Child Benefit and policies to allow interest rates to be lowered. For example, more free childcare provision was a priority for 15% of all households but favoured by between 18% and 21% of those aged under 50; and 21% of those with children.
• Older adults and 2019 Conservative voters favoured reducing taxes (Council Tax, motor-related taxes, Income Tax and National Insurance, and Inheritance Tax). For example, households  where the main financial decision maker is of pensionable age, were much more likely to prioritise reductions in Council Tax/rates (53% cf. 43% of all households) and taxes paid by motorists (40% cf. 27% of all households).
• 2019 Labour and Liberal Democrat voters were broadly similar, in that their top three ranking consisted of reduced council taxes (39% and 35% respectively), higher tax rates for top earners (33% and 31%) and cheaper energy tariffs for those on lower incomes or receiving benefits (34% and 26%). Lib Dem voters were more likely to favour reductions in inheritance tax (15% vs 8%), while Labour voters were slightly more likely to argue for a reduction in income taxes and national insurance (24% vs 19%) though still considerably less likely to choose this than 2019 Conservative voters (36%).
• Non-voters were the most likely to favour reduced council tax rates (44%) and increased benefit rates for those out of work (22%) and increased child benefit (13%). They were also more likely to select ‘none of the above’ policies (13%).

Mubin Haq, CEO of abrdn Financial Fairness Trust, said:
“During the election campaign both Labour and the Conservatives have ruled out increases to our major sources of tax. As a result this is likely to mean significant cuts to a number of public services which are already visibly struggling. The public are clear as to which they would prefer - tax increases before public spending cuts, even if this means higher tax rises for their household.
What is remarkable is that this support for tax rises comes at a time when significant financial difficulties have increased by 40%, with nearly three million extra households facing serious financial problems or struggling financially since the last general election.”

Professor Sharon Collard, Chair in Personal Finance at the University of Bristol, said:
“The findings clearly show that people in the UK have much more nuanced views on these key election issues than the media headlines would sometimes have us believe. They understand there are trade-offs between what is good for their own household finances and what is good for the country overall.”