Spring Statement winners and losers revealed – will you be better off?
DRINKERS and low earners were among the winners in the Spring Statement today – while first-time buyers and those on benefits were some of the worst hit.
In her first Spring Statement as Chancellor, Rachel Reeves set out lots of cuts to public spending rather than raising taxes.
Among the announcements was confirmation that there will be no new tax rises and a clamp down on who can claim certain benefits.
Key announcements in the Spring Statement:
- No new tax rises: The Chancellor ruled out further tax hikes and pledged to crack down on tax avoidance, aiming to raise an extra £1billion.
- Growth downgraded for 2025: The OBR halved its GDP growth forecast for next year from 2% to just 1%.
- Growth boost from planning reforms: New housing policies expected to raise GDP by 0.6% over the next decade.
- Housebuilding surge: 1.3 million homes expected over five years, with construction hitting a 40-year high.
- £2.2billion extra for defence: Additional funding confirmed to help meet the 2.5% of GDP defence target.
- £400million Defence Innovation Fund: Backing new tech like drones and AI for the front line.
- Welfare shake-up: Targeted employment support and welfare reform to reduce benefit spending.
- Civil service cuts: New voluntary exit schemes and AI tools to shrink Government.
Here we round up who the winners and losers are from the Spring Statement.
Winners
Drinkers
The Chancellor did not hike the duty on alcohol today in a boost for drinkers, as expected.
Alcohol duties will remain at their current rate, rather than increase in line with inflation.
Alcohol duty is a levy that is charged on all drinks with an alcohol by volume (ABV) strength that exceeds 1.2% at the point of production or when imported.
These levies usually increase in line with inflation, as they did in February.
The government is responsible for deciding whether to increase or decrease the duty each year and inflation is often used as the benchmark for such decisions.
But the cost of your favourite tipple could still rise next month.
Industry experts have warned that the average price of a pint could exceed £5 for the first time next month.
Pubs have warned that their costs will soar when changes announced in the Autumn Budget come into force.
These include an increase in the minimum wage, higher National Insurance bills for employers and a cut to business rates relief from 75% to 40%.
Smokers
Smokers can breathe a sigh of relief as the Government did not hike the duty on cigarettes today, as expected.
What does this Spring Statement mean for Rachel Reeves?
By Ryan Sabey, Deputy Political Editor
RACHEL Reeves is trying shift any blame away from herself and the Labour government as it grapples with the sluggish economy.
The Chancellor is telling MPs that the “world had changed” meaning she has to take drastic action when it comes to spending and welfare.
The trouble for Ms Reeves and Sir Keir Starmer is that they put growth as their “number one” mission and that, to put it mildly, is stalling.
The independent watchdog say growth forecasts has halved for this year and the financial headroom wiped out – hence the savings to be made elsewhere.
But for Ms Reeves all this puts her in a very tight spot insisting she will stick to her iron clad rules – with her looking to find up to £15 billion of savings.
The Tories and commentators are aiming their fire over how she hasn’t helped herself as growth has fallen.
They point out that she was the person who decided to go on a £40 billion tax raid at October’s Budget – with £25 billion of it falling on the shoulders of business.
The upcoming Donald Trump-led tariff war could easily throw the government off course again unless a limited trade deal can be struck.
Rachel Reeves will be pushing every leaver possible to get that over the line before it kicks in next week to give her some breathing space.
But we could be back at square one come the autumn with the Budget to balance the books – with speculation there could be tax rises and Whitehall departments scratching around for more savings.
A rise was not expected as in October Rachel Reeves confirmed that duty will only increase once a year in the Budget, which is usually held in the Autumn.
Prices will increase in line with the Retail Price Index plus an extra 2%.
A pack of 20 king size cigarettes currently costs £16.78, up from £16 in October.
Low-paid workers
The National Minimum and National Living Wage will go up in April, boosting the income of millions of workers, as expected.
From April 1, those on National Living Wage will see their pay rise by around £1,400 a year for those on a 35-hour working week.
Their hourly wage will rise from £11.40 to £12.21.
Full-time workers on the National Minimum Wage could see their pay boosted by £2,500 a year.
The changes apply if you are in a full-time, part-time or temporary role.
The amount you will receive depends on your age or if you are in an apprenticeship.
For example, 18-20-year-olds will see their wage rise by £1.40 to £10 an hour.
What is the Spring Statement?
By Ryan Sabey, Deputy Political Editor:
Rachel Reeves is delivering the Spring Statement – nearly fifty years after the first such “mini-Budget” was delivered.
The statement, which over the years has been delivered in both autumn and Spring, was started in 1976 at the end of the year.
The law changed in 1975 to ensure there were two economic forecasts every year as opposition MPs and the public could keep track of government plans.
Rachel Reeves has insisted there will only be one major fiscal event each year with a Budget planned for the autumn – so no tax hikes or reductions this year.
Her Labour predecessor Gordon Brown held the Budget in the the autumn and each autumn he would deliver a Pre-Budget Report giving an update on the state of the country’s finances.
Fast forward to 2010 and George Osborne, Chancellor until 2016, set up the Office for Budget Responsibility, to provide an independent forecast.
They were also there to dissect the state of the economy – producing five-year forecasts twice a year.
But the OBR weren’t asked for a forecast by short-lived Prime Minister Liz Truss in 2022 despite their mini-Budget containing an array of tax cuts causing a market meltdown.
Losers
Taxpayers
The Chancellor has said that she only wants to make major tax and spending announcements once a year, in the Budget.
As a result, she did not announce any cuts to income tax thresholds today.
However, planned freezes to tax thresholds could still cost households hundreds of pounds. Use our Spring Statement calculator to work out if you’ll be hit.
Benefits claimants
Millions of people on benefits will be hit hard by the raft of changes confirmed by the Chancellor in her Spring Statement.
The government has said it needs to cut welfare spending to balance the nation’s finances and get more Britons into work.
Today the Chancellor confirmed “if you can work, you should work!” as she tries to fix the “broken system”.
She added: “More than 1,000 people qualify for PIP every single day.
“And one in eight young people are not in employment, education or training.”
Reeves unveiled additional reductions to Universal Credit’s incapacity payments.
For existing claimants, the current incapacity payment of £416.19 per month for individuals with limited capability for work and work-related activity will remain unchanged and frozen at this level until 2030.
And it was today confirmed that for all new claims from April 2026, this amount will be halved to £208.10 per month, or £50 per week, and frozen at this reduced rate until 2030.
Reeves today said the measures are predicted to claw back £4.8billion a year for the Government with changes to eligibility for PIP set to account for the largest proportion of savings.
Other changes were outlined last week in a Department for Work and Pensions green paper.
They included:
- Merging Jobseeker’s Allowance and Employment Support Allowance, with a system that awards higher payments to those who have a work history compared to those who have not.
- Abolishing the Work Capability Assessment (WCA) by 2028, with all health-related payments to be transitioned to PIP in the future.
- Banning under-22s from claiming incapacity benefits under Universal Credit entirely.
- Introducing an above-inflation rise to Universal Credit’s standard allowance, while reducing the highest incapacity payment.
- Raising the eligibility threshold for PIP, aimed at achieving £5billion in annual savings.
- Launching a “Right to Work Guarantee”, allowing unemployed individuals to attempt returning to work without losing benefits if they find it unsustainable.
The Government said it will toughen the criteria for claiming a Personal Independence Payment.
Meanwhile, by 2028 it will scrap the Work Capability Assessment of Universal Credit, which determines whether someone is deemed fit for work or not.
Civil service workers
The Chancellor confirmed plans to cut Civil Service running costs by 15% by the end of the decade.
The plans were first announced at the weekend and will mostly include reducing back office and administrative roles, rather than front-line services.
These could include human resources, policy advice, communications and office management.
In total, around 10,000 jobs are expected to be cut.
The Chancellor also announced spending cuts for some government departments.
The announcements come as part of an ongoing spending review looking into all areas of government activity.
Whitehall departments will be sent a letter from Cabinet Office Minister Pat McFadden in the coming week.
It will include instructions on how to make savings of more than £2billion a year by the end of the decade.
Homeowners and first time buyers
Anyone buying a house had been hoping for an extension to the current Stamp Duty rules – but sadly they were left out of the statement.
Households are also braced for more pain as Spring Statement forecasts could spell mortgage gloom.
The Office for Budget Responsibility has warned the treasury that inflation is now forecast to peak at 3.8% in July 2025, higher than previous expectations.
This could mean the Bank of England holds off on further interest rates cuts, which means mortgage interest rates could remain high.
Read our live blog for all the latest updates on the Spring Statement.
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