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Spring Statement 2025 highlights
3 min read 27 Mar 25
Chancellor Rachel Reeves delivered her Spring Statement on Wednesday 27 March. Unlike previous statements, this one was less about tax or finance-related changes, and more about wider policy shifts. Although it may not impact your finances directly, here’s a short summary of the highlights. It also includes some of the latest economic forecasts from the Office for Budget Responsibility (OBR) which were unveiled.
Key points from the Spring Statement
- The OBR has revised the UK's growth forecast down for 2025 from 2% in autumn 2024 to 1%. This is still more optimistic than the Bank of England’s forecast of 0.75%
- Inflation is forecast to average 3.2% this year, up from 2.6% previously forecast, before falling back to 2.1% in 2026 and is expected to reach the Bank of England's 2% target from 2027 onwards
- Defence spending to increase to 2.5% of gross domestic product (GDP) by 2027
- Capital spending increasing by an average of £2bn a year
- Overseas aid to be reduced from 0.5% to 0.3% of GDP to fund the increased defence spend
- People will be on average £500 a year better off from 2029, relative to the OBR’s autumn forecast
- Planning reforms will help to build over 1.5m homes within five years
- Standard universal credit allowance increase from £92 per week in 2025-26 to £106 per week in 2029-30
- Welfare benefits cut by £4.8bn, including stricter eligibility rules around applying for personal independence payments (Pips). Plus incapacity benefits under universal credit to be halved and cut for new claimants
- Plans to reduce tax evasion that will increase the number of tax fraudsters charged each year by 20%
- There had been a lot of speculation about changes to ISAs (Individual Savings Accounts) but no announcements from Chancellor Reeves in her speech to parliament. However the government are looking at the way ISAs are structured
It’s important to know tax rules can change and the impact of taxation, and any tax relief, depends on your personal circumstances.
Getting financial advice and support
It’s likely that the changes in the Spring Statement will impact your finances in one way or another. If you are looking for help to navigate any of these changes or to help manage your finances in general, speaking to a financial adviser could be of real value.
A financial adviser will look at your overall situation and longer-term goals to create a manageable plan for you.
If you don’t already have an adviser you can find a financial adviser that's right for you. Visit our ‘Get financial advice ’ page to find out more.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser. The views expressed here should not be taken as a recommendation, advice or forecast.