Spring Forecast 2025: what are the speculated changes? 

The Spring Forecast is coming up on 26 March, over a week before the current tax year ends and a new one starts. We explore what the Spring Forecast is, the rumoured announcements, and how it’ll affect your money. 

The below announcements are only speculation, so they may not necessarily happen. Before making any major financial decisions, it’s a good idea to seek expert financial advice first.  

What is the Spring Forecast? 

In the Spring Forecast, chancellor Rachel Reeves will provide an update on the UK economy. 

A forecast from the Office for Budget Responsibility (OBR) will be revealed to explore the impact of the government’s decisions and if it thinks it’ll stand by self-imposed borrowing and spending rules. 

It’s worth stressing this won’t be the same as the Autumn Budget when £40 billion of tax rises and major policy announcements were revealed, especially after the UK government said it ‘remains committed to one major fiscal event a year.’ 

This offers individuals and businesses ‘stability and certainty’ on upcoming tax and spending changes. However, Reeves may still use the Spring Forecast to boost the UK amid low levels of growth and the impact of global factors such as US trade policies.   

The likelihood of Reeves announcing spending cuts or tax rises has increased recently after Bloomberg claimed leaked data suggested the OBR has downgraded its economic growth forecast – sparking an inquiry. 

The OBR has previously suggested that Reeves had £9.9 billion of ‘financial buffer’; however, reports now indicate that this has been eroded as stubborn UK inflation, high borrowing costs, and trade policies have had an impact.  

What are the rumoured announcements? 

There has been much speculation over billions of pounds of government spending being cut, particularly on welfare, as spending has soared over recent years.  

Here, we’ll explore the speculated announcements and their impact on your money. 

Proposed cash ISA changes 

Individual savings accounts (ISAs) can be a useful way to save and invest, as any interest, income, or capital gains are tax-free. You can save up to £20,000 a year across multiple ISAs, but some have different limits, such as the lifetime ISA. 

Basic-rate taxpayers have an annual personal savings allowance of £1,000, but this falls to £500 for higher-rate taxpayers. In contrast, additional-rate taxpayers don’t have an annual allowance, so using an ISA is a way to minimise or avoid tax legally.  

Rumours have emerged the £20,000 cash ISA limit could be reduced significantly to £4,000 a year. By cutting the ISA allowance, Reeves hopes to encourage people to invest in a stocks and shares ISA to boost economic growth in the UK. 

Cutting the cash ISA annual allowance would have huge implications.  

There has already been resistance from some banks and building societies as cash ISAs offer capital to lend to individuals and businesses, which may impact mortgage availability for first-time buyers. 

Additionally, these speculated changes mean people would not be able to shelter as much money tax-free, and if they don’t want a stocks and shares ISA, they may face a tax bill. A cash ISA is helpful for emergency savings if you aim to save at three months of expenses.  

Income tax threshold freeze 

Income tax thresholds, which affect how much tax an individual pays, were frozen by the previous government until 2028. Reeves said this freeze would end in 2028 and rise in line with inflation.  

However, it’s speculated that the income tax threshold freeze will be extended, so more people are pushed into higher income tax bands as their wages rise, making it a stealth tax.  

According to the Institute for Fiscal Studies, freezing the income tax thresholds beyond 2028 would bring in between £3.5 billion to £4 billion a year, provided inflation is at least 2% and national insurance thresholds are also frozen.  

National insurance reliefs 

In the Autumn Budget, the chancellor announced that employer’s national insurance (NI) will increase from April 2025. 

Since the announcement, many businesses have said the change in NI will result in higher costs, may impact hiring plans, or costs could be passed onto customers. 

Due to the expected widespread negative impact, some experts believe that NI reliefs could be introduced for charities or other measures could be announced to reduce the effects.  

Inheritance tax gifting rules 

Some of the most significant changes announced during the Autumn Budget focused on inheritance tax (IHT). The threshold was frozen until 2030, and inherited pensions will be brought into IHT starting in April 2027. 

There were also new proposals to reduce IHT relief for farms and businesses, which have been unpopular. 

There has been recent speculation that IHT gifting rules, which allow someone to gift assets tax-free if they live at least seven years following the gifting, could be extended to 10 or 15 years. 

If the IHT gifting rules were changed, more people would likely pay IHT for gifts if the person who gave it passed away during the extended period.  

Lifetime ISA 

The lifetime ISA can be used to save for your first home or retirement. You can save up to £4,000 a year and get a 25% top-up from the government (up to £1,000 a year). 

The Treasury Committee has launched a review into whether the lifetime ISA is still fit for purpose, including looking at annual contribution limits, if the 25% withdrawal limit should change, and if the property price cap should be raised from £450,000 or removed entirely. 

As house prices have soared over the last few years and the lifetime ISA property price cap has remained unchanged, it’s become more challenging for people to use this to buy their first home. 

Get expert financial advice 

It’s impossible to know what to anticipate with the Spring Forecast, which can make many feel uncertain about what to expect. 

While the above changes could happen, it’s vital to stress that these are not guaranteed.  

It’s a good idea to understand what the Spring Forecast means for your money and to get expert financial advice, especially if you’re considering any major changes. 

Unbiased can quickly match you with a qualified financial adviser who can look at your unique circumstances and future goals to recommend the best course of action.