The “Maggie Effect”, How Thatcher Changed UK Personal Finance Forever

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As the nation prepares to say ‘Goodbye’ to Margret Thatcher, leading personal finance website,, comments on the 'Iron Lady's' ongoing impact on the world of UK personal finance.

Thatcher's Personal Finance Legacy

Few could argue that Thatcher’s impact was anything less than seismic on UK personal finance.

For the generations Britons who’ve grown up in the shadow of Thatcher’s legacy it’s hard to imagine how different the UK was before she came to office. More than any other post-war Prime Minster Thatcher changed the fabric of British life, perhaps nowhere more so than in the world of personal finance which she affected in numerous ways.

Stocks & Shares
Before Thatcher came to power the stock market was the preserve of a financial savvy elite (just 7% of the UK population owned shares). Readers of the broadsheets might have some grasp of the comings and goings of ‘The City’, but these ivory towers were well beyond the understanding and interest of the common man. Privatisation changed that and by the end of the 1980’s around 25% of adults had shares as an investment.

Mortgages (Right to Buy)
With the 1980 Housing Act, the Thatcher government turned the UK housing market on its head by offering tenants of council owned dwellings the right to purchase them from the state at a heavily discounted rate. The scheme was not without its critics, but it spurred on the UK mortgage market and increased owner occupied houses from 55% of dwelling to around over 70% by 2003.

Credit Cards
Thatcher tinkered with the UK tax system, reducing income tax whilst increasing VAT (from 8% to 15%). The additional money in their pockets gave the UK public the perception that they were better off. Hire purchase rules were relaxed and UK credit card use boomed. In fact, despite most people feeling wealthier, consumer borrowing actually tripled during the 1980’s.

Perhaps one of the least successful of Thatcher’s personal finance initiatives; towards the end of the 1980’s the government introduced changes to the pension system to facilitate saving by individuals without a company scheme. It also allowed those who choose the ability to contract out of the established SERPS (State Earnings Related Pension Scheme). The intent from the government was clear, allow people to take responsibility of their own pension arrangements. Unfortunately mis-selling rocked the industry. Pushy personal pension salesmen cajoled people into switching out of their established schemes into riskier schemes. Compensating victims left the industry with a black mark against its name and a bill of around £11 billion.

The Budget
Perhaps the biggest change Thatcher made; one that is still considered a political masterstroke and also one that has resonance in the politics of today, was in declaring she would run the country’s finances like a household budget - Spending prudently and within means. This single statement was a call to arms for responsible financial management both of the country (for which we hear echo’s almost every day from the new political elite) but also a challenge to the people of the UK to manage their own finances well and be masters of their own destinies.

A spokesperson commented:

"Some critics might argue that Thatcher did more harm than good to the UK personal finance. That her laissez faire approach to the banking establishment sowed the seeds of our current economic strife, but like her or loath her, very few could argue that Thatcher’s impact was anything less than seismic on UK personal finance!"
_______ is one of the UK’s leading personal finance comparison websites. Based in Colchester, Essex, has been helping UK consumers get a better deal on credit cards, saving, loans and more for over five years.

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Mark Scott
Freedom Marketing Limited
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