With the dust finally settling on one of the most intriguing and turbulent weeks in British politics for over three decades, the impact on personal finances is gradually starting to emerge.

We’re all used to politicians saying one thing and doing another (which rather begs the question as to why any of them bother wasting thousands of pounds on glossy manifestos in the first place) but it seems coalition governments receive carte blanche to take this to a whole new level.

National Insurance: The proposal to scrap the planned rise in National Insurance has only been partly implemented, meaning employees will still be hit with the 0.5% rise from April 2011, and higher earners by a 1.5% increase. This should be at least somewhat offset for lower earners with a vague pledge to eventually raise the starting threshold to £10,000, although no firm date has been set for this. There is, though, a commitment for a “substantial increase” in April 2011.

Equitable Life: There was good news, too, for the one million Equitable Life members who watched their retirement funds dwindle with the provider’s near-collapse in 2000. The new government has pledged to compensate investors for their “relative loss”; an improvement on the proposals outlined by the outgoing Labour administration, although sadly too late for many whose final years were spent in undeserved poverty.

The Deficit: Further details of just how the so-called Con-Dem coalition intends to go about tackling the enormous deficit racked up under Labour are also emerging. Capital gains tax is certain to be increased from its current rate of 18% for all non-business assets, perhaps to 40% or even 50%, in a move that will hit those who have invested in second homes or shares, while child trust fund and child tax credit payments for higher earners will also be hit hard (and most likely scrapped altogether).

Certain policies proposed by the Conservatives are now firmly filed under “too tricky for now”, however; notably the pledge to increase the tax-free inheritance tax threshold from £325,000 to £1m per person and the rather dubious commitment to couples tax breaks simply on the grounds that they have been able to afford to get married.

 An emergency budget, which will be held at the end of June, should firm up a few more details, assuming David and George haven’t fallen out with their new best friends Nick and Vince by then. A rise in VAT – perhaps to as much as 20% – seems likely, which would further restrict the ability of the average consumer to save.

Housing relief

The Summer, though, is traditionally a time for optimism – full of vain hopes that we might be able to get the barbeque out of the shed and that England might progress beyond the quarter finals of a major football tournament – and it seems that cheer has spread to the housing market.

A survey by the Royal Institution of Chartered Surveyors revealed 17% more estate agents saw rising prices in April, compared to 9% reporting falls. But many also reported the number of new homes coming on to the market was greater than enquiries from househunters, suggesting predictions of stagnation for the rest of the year may not be far off the mark.

The Post Office has also provided a welcome fillip to first-time buyers, with the launch of a mortgage requiring just a 10% deposit, which is available on both a repayment and interest-only basis. A two-year fix is available at 5.49% while the base-rate tracker is set at 4.99% above the Bank of England’s rate, which was once again kept at 0.5% in May, with no ceiling or cap. Both products carry a £999 fee.

Other lenders, including Nationwide, Abbey and Northern Rock, have reduced their lending rates, although many still require at least 25% equity. Lloyds Banking Group, which includes the Halifax, meanwhile, has said it will no longer accept the future sale of a house or prospective inheritance as repayment methods on future interest-only loans as it seeks to reduce its exposure to house price falls.

There was a further boost for those looking to sell in the next few years with confirmation that the new government will look to scrap Home Information Packs (although not Energy Performance Certificates), although this is likely to go down rather less well with the hundreds of home inspectors who left secure jobs to start a new career.

Saving grace

Savers all over the country would have been spitting into their Corn Flakes over the weekend, as their annual statements from cash ISAs dropped through the door. Those who have left their ISAs unattended during the economic downturn are now almost certain to be on rates no higher than 0.5%, with many as low as 0.1%; effectively leaving the value of their investments falling year on year.

More switched-on savers will be looking to transfer existing ISAs into higher-interest products, although many of these require a fixed-term deposit. Rates approaching 3% are possible for those willing to sign up to a two-year deal.

While you’re at it, now might be a good idea to review your current account too, with authorised overdraft charges now at a 10-year high. Average interest rates now stand at 14.22% despite record low rates from the Bank of England. Court judgements against unauthorised borrowing charges have been blamed for a change in the way banks seek to make money from current account lending.

Deliver us from temptation

Yet anyone with aspirations of saving or investing money prudently over the next couple of months would do well to steer clear of the four-yearly extravaganza that is the football World Cup, which kicks off in June in South Africa.

Market research company Mintel suggests 63% of people will increase their leisure spending during the four-week tournament, with food, drink, betting and newspapers the likely recipients and sales of televisions, barbeques and sportswear also expected to increase. While this is undoubtedly good for the economy and probably far more fun than investing funds, from a personal finance perspective it can only be something an own goal in the long run.