What can we expect from the Spring Statement 2025?

Edward Willday

2 mins

On Wednesday 26th March 2025, the Office for Budget Responsibility (OBR) publishes their forecast for the UK economy. Following this, the Chancellor of the Exchequer, Rachel Reeves, will make her Spring Statement in Parliament. Reeves committed last year to a single Budget per year, where significant fiscal and economic changes are announced. The Autumn Statement in October 2024 was classed as a Budget. Therefore the Spring Statement is not expected to contain significant changes in addition to announcements already made. In this article, we’ll discuss changes already announced that come into force from 6th April 2025, plus what we can expect from the Spring Statement.

A view of the UK Parliament building from across the Thames with part of a bridge on the right

What has happened since the Autumn Statement 2024?

Much has changed in the global economy since the Autumn Statement in October 2024. Donald Trump has been re-elected as President of the United States of America, and has begun imposing tariffs that could directly and indirectly affect the UK economy. The wars in Ukraine and the Middle East have continued, too. Since the Autumn Statement in October, the Bank of England interest rate has dropped from 5% to 4.5%. UK inflation has also increased from 2.3% to 3%.

Previous announcements that come into force from 6th April 2025

There were a number of announcements made in October’s Autumn Statement that will begin on 6th April. National Insurance contributions for employers are set to rise from 13.8% to 15%. The Secondary Threshold, which indicates when employers must start paying National Insurance for individuals, is moving from £9,100 to £5,000. This will remain in place until April 2028, when it will begin to rise in line with the Consumer Price Index (CPI). On a more positive note for employers, Employment Allowance is increasing from £5,000 to £10,500, meaning that they can get a higher tax break and reduce employment costs. The threshold for eligibility, previously set at National Insurance bills of £100,0000 or less, is also being removed.

April will also see an increase in National Living Wage and National Minimum Wage:

Two piles of UK coins on a table

Stamp Duty Land Tax is paid on property or land over a certain price in England and Northern Ireland. In the Mini Budget of September 2022, the thresholds were temporarily increased. From 1st April, these are currently due to return to their pre-Mini Budget levels, as below.

What is expected to be announced in the Spring Statement?

Whilst no major announcements are expected in the Spring Statement, there is some speculation over potential announcements. It is widely expected that announcements will surround spending cuts as opposed to tax hikes. However, some commentators expect the freeze on income tax thresholds to be frozen beyond the current expectation of April 2028. Currently, there is a personal allowance of £12,570. This is tax-free income for all. The threshold for falling into the basic tax bracket, paying 20% tax, is £37,700. Those earning up to £50,270 will fall into the higher rate tax bracket and will pay up to 40% tax. The threshold for the additional rate of tax, currently 45%, is £125,140.

By extending the freeze on these thresholds beyond 2028, this is an effectual tax increase. As individuals’ pay rises in line with inflation, for example, more people will find themselves falling into a higher tax bracket. So whilst the government can say they are not increasing the rate of tax, they would effectively be making more people’s income be subject to tax.

The government is keen to encourage more people to invest in UK-based private-sector firms. Reeves may therefore reduce the existing threshold for saving in Cash ISAs from £20,000 per year to £4,000. They will be hoping to encourage more to invest in Stocks and Shares ISAs instead, as this is investment in the private sector. This could have quite an impact on investors’ financial plans, so it’s important to seek advice and ensure you are still on track to achieve your retirement goals.

Other possible announcements

As mentioned previously, the Stamp Duty Land Tax thresholds are set to revert to pre-Mini Budget levels. However the government could win favour by maintaining the existing thresholds for future years. This could mark the beginning of a wider property tax reform.

Hand palm facing up, with a keyring of a home and two keys, next to door lock

The Autumn Statement announced increased National Insurance contributions for employers. Many businesses will be hoping for measures to be announced in the Spring Statement to ease the burden on SMEs. This could include temporary tax reliefs or other incentives. This would help them to grow their businesses in the coming tax year.

There have been protests from farmers since the Autumn announcement regarding the £1,000,000 limit on agricultural and business property relief in inheritance tax. There has been speculation that the limit could be increased, to placate those in this industry.

Overall, Labour has not won much favour recently in terms of their policy announcements. They may look to use the Spring Statement to recoup some of their lost percentage points in the polls.

When will we know what’s been announced?

The Spring Statement is due to be announced on Wednesday 26th March 2025. It is usually read in Parliament at around midday. Keep an eye on our blog for a breakdown of the announcements, and what they mean for you!