The Conservative Party has unveiled a new £5,000 “first-job bonus” aimed at helping young people buy their first home.
Shadow Chancellor Mel Stride announced the proposal at the party’s Manchester conference, saying it will “reward work” by redirecting early National Insurance contributions into a savings account for home deposits.
The plan will be funded through £47 billion in spending cuts over five years, targeting welfare, foreign aid, and civil service costs.
Conservative Party Pledges Support for First-Time Buyers
The Conservatives’ new proposal aims to give young workers a financial boost as they enter the job market.
Under the scheme, new full-time employees would see a portion of their early National Insurance payments diverted into a dedicated home-buying savings account, capped at £5,000 per person.
Mel Stride said the initiative would help those “struggling to take the first step onto the property ladder,” calling it a plan that “rewards work and responsibility.”
Funding the £47bn Plan
To fund the new rebate, the party says it will identify £47 billion in savings over five years.
Key measures include:
- £23bn from welfare spending reform
- £8bn through civil service staff reductions
- £7bn from foreign aid cuts
- £3.5bn from ending hotel accommodation for asylum seekers
- £4bn by reserving benefits and housing for UK nationals
- £1.6bn by scaling back environmental subsidies
Stride told delegates: “There’s no more pretending we can spend money we don’t have. Britain needs a responsible approach to rebuilding confidence in our economy.”
Welfare and Aid Cuts Spark Criticism
The plan has already sparked political and humanitarian backlash, particularly around welfare reforms affecting those with mild mental health conditions such as anxiety or ADHD.
Aid organisations also condemned the cut to the overseas aid budget from 0.5% to 0.1% of national income, calling it “reckless and morally indefensible.”
Romilly Greenhill, CEO of Bond, said:
“These proposals would harm the world’s poorest communities while doing little to fix the UK’s long-term fiscal challenges.”
Economic Strategy and Party Renewal
The Conservatives’ announcement marks a key moment in their attempt to rebuild economic credibility after recent electoral losses.
Party leader Kemi Badenoch, elected a year ago, has sought to reposition the Tories as the “party of work and growth,” contrasting Labour’s housing market reforms with policies designed to incentivise saving and home ownership.
The proposal also underscores the party’s focus on fiscal restraint as a counterpoint to Labour’s spending commitments.
Think Tanks Warn of Fiscal Risks
Economists at the Institute for Economic Affairs (IEA) welcomed the return to spending discipline but warned that the cuts may not be sustainable without addressing age-related costs like pensions.
Tom Clougherty, executive director of the IEA, said:
“No party can balance the books solely by cutting what their supporters dislike. Without pension and healthcare reform, this risks being temporary relief.”
Analysts also cautioned that deep welfare cuts could widen inequality and reduce household spending at a fragile moment for the UK economy.
Impact on Young Workers and Housing Market
Experts note that while the £5,000 rebate could help some young buyers, it may not significantly improve affordability unless paired with broader housing supply reforms.
With the average first-time buyer deposit exceeding £34,000, the rebate is a modest but symbolic step toward helping young adults save.
The policy is likely to appeal to younger voters priced out of the housing market, a demographic that could prove decisive in the next general election.
What can help
Navigating tax rebates and housing schemes can be complex but the Pie app simplifies the process.
With real-time tax tools, rebate calculators, and personalised updates, Pie empowers UK taxpayers to track their money, claim eligible savings, and plan for major life milestones such as buying a home.
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