What does the Andy Burnham government mean for your money?
Written by Boring Money
22 July, 2026
Andy Burnham's in Number 10 - so what's actually going to happen to your mortgage, your tax bill and your savings? We cut through the noise on what a Burnham government means for your money, from energy bills to a possible wealth tax.
The new Prime Minister is installed in Downing Street and has already made a flurry of announcements designed to lower the cost of living for families, cutting VAT on energy bills and capping bus fares. But there are still nerves around the impact of a Burnham premiership on household budgets: what changes are likely to be on the cards?
Will Andy Burnham’s government push up your mortgage?
The biggest test of Andy Burnham’s premiership may not be the voters, it may be the gilt market. Gilt yields
determine the cost of government borrowing, but also the cost of mortgages and other borrowing for individuals and businesses. Gilt yields have already been edging higher in response to inflationary pressures created by the war in Iran, and the political uncertainty has created greater fragility.The early signals from an Andy Burnham government suggest higher taxation, increased public spending and potentially some additional borrowing. However, the gilt market has already priced in a buffer for this and continues to look attractive compared with many international peers.
He says that any meaningful rise in borrowing is likely to be limited by two factors.
First, the fresh memory of the gilt market's blowback to unfunded spending under Liz Truss. Second, Chancellor John Healey's experience of working with private capital to fund infrastructure projects during the Blair era, which may encourage a more balanced approach to public investment.
For the time being, the appointment of Healey as Chancellor appears to have kept gilt markets relatively calm. He is seen as a safe pair of hands. Nevertheless, it is difficult to rule out further volatility
around the budget. However, it appears that Burnham and Healey recognise the necessity of keeping bond markets in check.Are your taxes going up under the new government?
Burnham has committed to following the existing fiscal rules, and to the 2024 Labour Party manifesto pledge not to increase taxes on “working people”. That means no increases in the main rates of income tax
, employee National Insurance contributions or VAT. The manifesto also pledged not to increase corporation tax above its current 25% rate.However, as Rachel Reeves discovered, this means that any tax rises need to come from inelegant and piecemeal changes to the tax rules that add complexity and bring uncertainty for certain segments of the population – landlords, farmers, small business owners, for example. Tom Selby, director of public policy at AJ Bell, highlights the problem with this approach.
Uncertainty is the enemy of ordinary Brits too, who struggle to make plans for the future with confidence if they don’t have certainty the goalposts won't be moved.
The obvious target is high earners and homeowners, but Charlotte Kennedy, Chartered Financial Planner at Rathbones says the UK already has a highly progressive income tax system, with a relatively small group of higher earners shouldering a disproportionate share of the burden. She points out that someone earning £150,000 earns 3.8 times the median full-time salary yet pays more than 10 times as much in income tax.
Frozen tax thresholds have also steadily pushed more people into higher tax bands without a corresponding improvement in their standard of living. This is particularly relevant for HENRYs - high earners, not rich yet - who may look affluent on paper but are often juggling hefty mortgages, childcare costs, pension contributions and other financial commitments.
So, while the government may want to pursue a different economic strategy, the question is how much more pressure can be placed on the same relatively narrow group of taxpayers. The key issue is not simply whether taxes will rise, but who will ultimately be expected to pay for Burnham’s economic agenda - and whether those already carrying a disproportionate share of the burden have much more capacity left.
Could a wealth tax be on the way?
Burnham has not ruled out a wealth tax. He is known to favour a land value tax
that would target property wealth, but implementation would be complex. In the meantime, the Mansion Tax on homes over £2m will begin in 2028. Chris Etherington, tax partner at RSM UK, says Burnham may also look to reform capital gains tax (CGT) and inheritance tax.There appears to be growing sentiment in the Party that investment and passive income should be taxed more like earned income. Substantial CGT reform therefore appears to be on the table, though little has been said by Burnham on the detail. Options could include aligning CGT rates more closely with income tax, removing the CGT uplift on death, and a possible introduction of an ‘exit charge’ on individuals leaving the UK. All these were considered in a review of CGT carried out by the Office of Tax Simplification in 2020.
Burnham has previously suggested replacing IHT with a flat-rate social care levy. During the Makerfield campaign, he also said he would review the agricultural property and business property relief allowance introduced in April 2026.
In reality, most Britons would like a bit of stability rather than constantly worrying that they are going to be hit with a potentially life-changing taxation bill simply because they own a property in a certain area. The speculation around the last budget on potential tax changes was extreme and damaging, prompting many savers to make wealth-destroying decisions over selling assets or taking the tax-free allowance from their pension. Healey would be better to hint at consistency, rather than float a series of tax-raising measures.
Will your energy and travel bills come down?
Andy Burnham’s flagship pledge to date has been the removal of VAT on energy bills. This is unquestionably a useful boost for consumers and businesses, and may even, at the margin, reduce inflation. However, it probably won’t move the dial on the cost of living for many households. He has also said that he will introduce some travel subsidies, capping bus fares at £2. Again, this may help at the margins, but is unlikely to be transformative by itself.
Nevertheless, these early policies indicate a direction of travel. Burnham recognises that the cost of living is a problem and until he can make supply side fixes, he is willing to do what he can with limited budgets to ease the pressure on households.
Is now a good time to invest in UK stocks?
Investors in UK plc have had a better time more recently, but it has been an uncomfortable decade for the country’s stock markets. More recently, there has been progress on reshaping the UK’s capital markets through the Mansion House reforms, and it is hoped that the new Chancellor will continue to support this initiative.
Andy Burnham takes over the reigns when the UK equity market is for sale, with a series of approaches and takeovers for UK listed companies already taking place this year. This trend will carry on.
However, international buyers are tending to buy UK companies with international operations suggesting that the UK domestic market remains relatively unattractive.
The revolving door at Westminster for Prime Ministers has not helped that.
The stakes are high. The UK equity market represents 3% to 4% of global equity market capitalisation, and Scott believes it is in danger of becoming “a mere side show”.
There is a strong feeling that this is the last roll of the dice for UK plc.
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