Spring Statement 2025: what has been announced? 

In the Spring Statement, chancellor Rachel Reeves provided an update on the UK economy and the OBR’s latest economic forecasts were revealed.  

The UK government said it ‘remains committed to one major fiscal event a year,’ but there were concerns that Reeves would announce spending cuts or tax rises during the Spring Statement. 

However, UK households are expected to be £500 better off by the end of the decade, says Reeves, citing the OBR. 

While no major tax policies were announced, there’s plenty to explore in the Spring Statement.  

What is the OBR’s outlook? 

Before we explore the OBR’s outlook, it’s worth stressing that Reeves says the government is sticking to its self-imposed rules and expects to move from a deficit of £36.1 billion in 2025/26 to a surplus of £9.9 billion by 2029/30. 

In its forecasts, the OBR halved the UK’s growth forecast for 2025 from 2% in the autumn to 1%, but longer-term growth estimates have been upgraded.  

It upgraded estimated UK growth to: 

• 1.9% in 2026 

• 1.8% in 2027 

• 1.7% in 2028 

• 1.8% in 2029 

Inflation forecasts have also been revised from 2.6% to 3.2% this year, and it is expected to fall back to the 2% target by 2027.  

The OBR also confirmed that the government is on track to meet its stability and investment rules. The investment rule is that net financial debt must be falling as a share of gross domestic product (GDP) by the fifth year of the forecast. 

What was announced in the Spring Statement 2025? 

Many announcements in the Spring Statement focused on spending rather than tax or financial policies.  

No tax increases 

After £40 billion of tax increases were revealed in the Autumn Budget, many will be relieved that there were no tax increases announced today. 

Before the Spring Statement, there were rumoured changes to cash individual savings accounts (ISAs), inheritance tax gifting rules, and the income tax threshold freeze.  

However, while these didn’t materialise, the government has a few initiatives planned. 

In its published Spring Statement document, it confirmed it would look at reforms to ISAs to ‘get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.’ 

The government will also publish an interim report about what will happen next with the business rates system and look at how to ensure the UK is ‘the best place in the world to start and grow a business.’ 

Welfare reforms

Before today’s Spring Statement, the government outlined various changes to the benefits system in the hopes of saving £5 billion a year by 2030. 

The OBR expects the savings from welfare cuts to be £3.4 billion, lower than government expectations, while welfare spending as a share of GDP will decline between 2026 and 2027.  

Reeves announced the universal credit health element would be reduced by 50% and then frozen for new claimants, the latter of which was not anticipated. 

The universal credit allowance will rise from £92 per week in 2025/26 to £106 per week by 2029/30. There are also going to be stricter eligibility tests for personal independence payments from November 2026.  

Were there any major investment announcements? 

Reeves says the government plans to invest £2 billion in affordable homes and £1 billion to help people get back to work. 

Defence spending will also increase to 2.5% of GDP from April 2027, while the Ministry of Defence will get £2.2 billion next year. 

Need help with your finances?  

While the Spring Statement isn’t as significant as the Autumn Budget, there’s a lot to unpack to see if it’ll affect your finances.  

Getting expert financial help can ensure you make the right decisions based on your unique circumstances. Unbiased can quickly match you with a qualified financial adviser who can help.