The Spring Statement 2025 that Chancellor Rachel Reeves delivered today comes at a time when global challenges are resulting in economic uncertainty for the UK. Revised growth forecasts and welfare adjustments were among the government’s latest measures to balance stability and investment, key pillars of the non-negotiable fiscal rules announced in the Autumn Budget.
Whether you’re a business owner or an individual taxpayer, we have highlighted the key points from the Chancellor’s Spring Statement 2025 below.
The Economy
Tax
- No tax increases were announced.
- A focus on cracking down on tax evasion and avoidance, which is expected to raise £1bn.
Universal Credit Changes
- Universal Credit standard allowance will increase from £92 per week in (2025/26) to £106 per week (2029/30).
- The Universal Credit health element will be cut by 50% and frozen for new claimants.
Defence and Foreign Aid
- Defence spending will increase to 2.5% of GDP, funded by a reduction in overseas aid to 0.3% of gross national income.
Household Income
- The OBR estimates that real household disposable income will grow at nearly twice the rate previously forecasted in the autumn.
- On average, households will be £500 better off per year under the current government policies.
With the OBR cutting their growth forecast, the economy consumer spending and investment could be affected. Businesses may need to plan for slower growth in the short-term.
The funding increases and investments announced in defence could offer new opportunities for businesses operating in this sector.
The Chancellor further emphasised her stance on tackling tax evasion. This was raised in her October Budget, and she stated that the latest investments in resources for HMRC would help to generate one billion pounds. With ambitious targets in this area, the need for businesses to ensure compliance with tax regulations is vital to avoid costly penalties.
