Chancellor Rachel Reeves’ spring statement to the House of Commons had little detail for those of us wondering about the pressure on our own finances.
Economist Paul Johnson, from thinktank the Institute of Fiscal Studies, described it as ‘a holding exercise ahead of the really significant decisions later in the year’.
However, there were some announcements, and omissions, that could affect you. Here are some of the most significant.
If you’re buying or selling a house
- You won’t benefit from a stamp duty cut
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Stamp duty – the extra tax you pay to the government when you buy a property – increases on April 1, with those buying a home worth under £250,000 no longer getting away stamp duty free.
The new rates mean those buying a property over £125,000 will pay the duty, while first-time buyers will be able to buy a property worth under £300,000 (previously £425,000 without paying the tax.
This represents the end of a temporary cut to the rates and had already been announced, but some had expected Reeves to extend the deadline so that homebuyers had more time to complete. She did not.
‘We have met a lot of first-time buyers who held out hope for the Chancellor to make a U-turn on stamp duty thresholds,’ says Matt Thompson, head of sales at estate agents Chestertons.
‘As this hasn’t been the case, first-time buyers will now have to ensure that their budget can cover the cost increase which means some might compromise on location or type of property.’
- You could find more affordable homes on the market
If you’re struggling to find a property, Reeves Spring Statement brought good news about more home building. The government aims to build 300,000 more houses every year and the Office for Budget Responsibility (OBR) which checks the economic figures increased its housebuilding forecasts yesterday.
Jeremy Leaf, former chairman of the Royal Institute of Chartered Surveyors (RICS) says the focus on affordable homes is welcome.
‘We still need more detail of where, when and how those spades are going to be in the ground,’ he says.
If you receive benefits like Universal Credit
- You could lose an average of £1,720 a year, or be £420 better off
The government had already announced big reforms to the welfare system, but Reeves announced further cuts to balance her books.
The ‘standard’ element of Universal Credit will rise, with the rate for a single person aged 25 or over increasing from £92 a week in 2025/26 to £106 a week by 2029‑30.
However, the health element which you get if you can’t work will be almost halved and frozen for new claimants, with some additional protections for the sickest. Existing claimants will see the health element frozen until 2029.
Eligibility criteria for the Personal Independence Payment (PIP) will be tightened
Accompanying analysis shows that three million families will lose out, with an average loss of £1,720 a year. However, 3.4 million families will be better off under the new rules, to an average £420 a year by 2029-30.
If you’re a taxpayer
- You’ll end up with a bigger tax bill
The Chancellor did not raise any taxes in the Spring Statement. However, the documents show that most of us will end up paying more tax anyway.
The OBR said taxes will rise from 35.3% of Britain’s gross domestic product to a record high of 37.7% by 2027-28.
This is because most of the thresholds for when we start paying tax remain frozen until at least 2028, while wages rise with inflation.
Jason Hollands, managing director of wealth managers Evelyn Partners says that the freeze is ‘putting everyone in a slowly tightening financial thumbscrew’, adding that the absence of further tax measures in the statement provides ‘only limited comfort’.
- You are more likely to be investigated by the taxman
Rachel Reeves promised funding for the tax office to investigate more individuals and businesses for tax fraud, believing this will bring in additional estimated revenue of £1bn.
You’re a saver or investor
- You can still use your cash ISA… for now
Earlier this year, many expected Reeves to use the Spring Status to cut the amount of cash that could be saved in a tax-free ISA to persuade more people to invest in shares.
This did not happen. However, experts warn changes are still on the cards, and urged those who want to put next tax year’s £20,000 Isa allowance into a cash account to do so as soon as possible.
‘Cash ISAs remain popular for a reason — they offer security, accessibility and certainty, particularly for older savers or those with shorter-term goals,’ says Rachael Griffin, tax and financial planning expert at wealth manager Quilter.
‘The key will be finding the right balance and encouraging investment without alienating those who rely on safer options.’
The next step is likely to be a consultation, and it looks unlikely that the £20,000 overall Isa limit will be cut in coming years, as yesterday’s document shows it remaining in place until at least 2029-30.
- You might get more help with investment
Michael Summersgill, chief executive of DIY investment group AJ Bell says that the Spring Statement document talked about ‘getting the balance right’ between saving and investing.
The government wants to encourage more people to invest their money, rather than saving in cash, and said it is working closely with the financial regulator to delivery targeted support ‘to give people the confidence to invest’.
If you invest in the stock market, some of your investments including defence stocks and housebuilders, could benefit from Reeves’ spending decisions, which include an extra £2.2 billion for defence and a focus on pushing housebuilding to 40-year highs.
If you’re a pensioner
- You’ll escape the welfare cuts but might pay tax
While working age benefits have been cut, pensioner benefits escaped the cull. The state pension will still rise using the ‘triple lock’ formula, meaning it always rises by 2.5%, inflation, or earnings growth – whichever is the highest.
However, frozen tax thresholds mean the pension is fast approaching a scenario where those who rely on the state pension alone will pay income tax on a portion of it.
Jon Green, head of retirement policy at Quilter says this is a ‘bizarre tax cliff edge for pensioners’ who are potentially only a year away from paying tax if their statement is their only income.
If you’re a civil servant
- Your job could be on the line
Reeves reiterated her plans for a leaner civil service, with money earmarked for severance payments as well as AI tools to replace manpower.
Whoever you are
You should expect more pain to come. As the Chancellor battles what she referred to repeatedly as an ‘uncertain world’ she has limited ability to hit the economic targets she has set herself without raising taxes or making cuts to public services.
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After the Spending Review concludes in June we’ll no doubt see more evidence of the cuts and changes needed, but we won’t know where the axe will fall for several months.
As Johnson, at the IFS, put it, ‘What the Chancellor has all but guaranteed is another six months of damaging speculation and uncertainty over tax policy. That didn’t go well between last July’s election and October’s Budget. I fear a longer rerun this year.’
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