Labour emerged with two key proposals at its conference today that could affect your money – credit cards and state pension age.
Credit card debt
Labour has announced plans for a cap on credit card interest. Shadow chancellor John McDonnell pointed to official statistics that show household debt reached over £1.8trn last year. Credit card debt is around £14bn and McDonnell said it could derail the economy.
He said in his speech: “Under Labour pressure, the government was forced to cap interest payments on payday loans. But more than three million credit card holders are trapped by their debt. They’ve paid more in interest charges and fees than they originally borrowed. The Financial Conduct Authority has argued for action to be taken on credit card debt as on payday loans.
“I am calling upon the government to act now and apply the same rules on payday loans to credit card debt. It means that no-one will ever pay more in interest than their original loan.”
Labour will reduce the steep rise in state pension age for women born in the 1950s, enabling them to retire from 64 years of age on a reduced state pension, instead of 66.
A woman aged 60 today can retire at 60 and a half. Women under 56 and a half will retire at 66. This latter group have a huge shortfall – equivalent to over £45,000 based on the new state pension rate of £159.55. the WASPI campaign (Women Against State Pension Inequality) estimated that around 2.6 million women have lost out because of the changes to pension law. Debbie Abrahams, the shadow work and pensions secretary, accused the government of ‘chaotic mismanagement’ over the reforms.
However, the move does not address the burgeoning pension costs for the state purse. State pension costs have risen by £11bn to £98bn in just five years.