On 22 June, Keir Starmer announced he would quit as Labour Party leader. The decision had been anticipated in the media, but the changes still pose some uncertainty over the coming weeks. Read on to find out what it could mean for your finances.
The Labour Party will need to decide on a new leader, which could cause market volatility. Once a new leader is in place, they will have control over fiscal policy that could affect business and personal finances.
While a change in political leadership can feel worrisome when you consider your finances, taking a long-term view is important.
Uncertainty may cause market volatility in the coming weeks
Investment markets may experience volatility in response to uncertainty, which could affect the value of your investments.
Following Starmer’s announcement, markets were relatively stable. According to the Guardian (22 June 2026), markets largely “shrugged off the news” as the resignation was expected. Indeed, a domestically focused index, the FTSE 250, was down just 0.01%.
As the new prime minister is announced and sets out their vision for the UK, markets could experience greater volatility, particularly if there are any surprises.
While this might feel disconcerting, keep in mind that short-term volatility is a part of investing, and markets have historically recovered.
In the last decade, the UK has had seven prime ministers, and while periods of volatility followed some of these leadership changes, the overall market trend has been upwards.
So, rather than reviewing your portfolio’s performance each day, take a look at the bigger picture. Assessing performance over several years could highlight an overall trend rather than short-term responses to periods of change.
While you might be tempted to make changes in response to volatility, sticking to your long-term investment strategy instead of making knee-jerk decisions could be beneficial.
It’s important to note that investment returns cannot be guaranteed, and past performance is not a reliable indicator of future performance.
The prime minister may change policies that affect personal finances
The new prime minister might also choose to go in a different direction from the previous one. For example, they could change tax rates or allowances, which might affect your personal finances.
While the potential for change could prompt some people to alter their financial plans, this often isn’t the best course of action.
First, with so much speculation, it can be difficult to know what information is accurate before it’s officially announced. Reacting to a news headline that isn’t confirmed could mean making unnecessary changes to your financial plan, which has the potential to harm your ability to reach your goals.
Second, when changes are unveiled, they often aren’t implemented immediately. So, you will typically have an opportunity to fully assess your options rather than needing to make a snap decision.
As your financial planner, we could alert you if anything might affect your long-term financial plan. We could help you assess how changes might affect you and offer guidance on how to mitigate the potential effects if appropriate.
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Over the coming weeks, there’s likely to be a lot of speculation about what will happen. Remember, reacting to rumours could lead you to make decisions based on scenarios that don’t materialise or ones that don’t align with your objectives.
If you have any questions about what Starmer’s resignation means for your finances, please get in touch.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.