What does the Spring Statement mean for your money?

Rachel Reeves had committed to ending a cycle of feverish speculation around ‘mini budgets’ and ‘fiscal statements’, and with the Spring Statement, the Chancellor has been true to her word.

Mike Ambery, retirement savings director at Standard Life, described it as ‘low key’, while James Ringer, director at financial education group Financial Markets Online, went even further and described it as a ‘Spring Sideshow’

Still, there are questions and figures from today’s statement that will directly affect your money.

Here’s what you should know.

What were the big economic headlines in the Spring Statement?

Reeves gave us an update on the nation’s finances. She said inflation had fallen and that she has more headspace for spending than she had previously in terms of being able to borrow money.

She told us that families will be £1000 better off by the next election, thanks to falls in energy bills and frozen rail fares.

That’s the good news.

But economic growth for this year has been downgraded from an expected 1.4% in November to 1.1% now, and unemployment is rising.

Figures from the Office of Budget Responsibility suggest this will peak at 5.3% this year – much higher than previously expected.

What does all of that mean for me?

Falling inflation might mean the government can cut interest rates sooner, easing the pressure on those with mortgages and other debt. But there’s a crucial new element in the mix, and that’s tension in the Middle East.

With oil prices up since the conflict began, inflation will tick up again, which might push back rate cuts and make mortgages more expensive.

There’s certainty for pensioners, with the announcement stating the state pension will increase by 4.8% in April under the Triple Lock.

That’s an extra £574.60 a year for those with a full National Insurance record.

It’s welcome for many, but pushes those who only receive the state pension close to the threshold of paying income tax for the first time.

The most that state pensioners will receive is £12,548 a year, just £22 less than the threshold where income tax kicks in at 20pc.

Figures from the independent Office for Budgetary Responsibility, published at the same time, suggested that an additional one million pensioners will be drawn into paying Income Tax by the end of the decade as the tax thresholds remain frozen, but pensions rise.

What about student loan repayments?

The Chancellor was notably tight-lipped about student loan repayments, despite the furore over student loan interest and frozen thresholds.

Robert Salter, director at financial advice firm Blick Rothenberg, said the government should have mentioned this and was disappointed.

‘Increasing numbers of graduates are becoming liable to the ‘graduate tax’ even when they’re in minimum wage type jobs,’ he said.

What wasn’t mentioned in the Spring Statement?

With no major pension changes announced, there was also no reassurance that changes weren’t afoot in the Autumn.

There were no tax changes mentioned for petrol, alcohol and cigarettes, because of events in the Middle East.

Although no changes to Inheritance Tax were announced, the figures show we will pay more of it. With thresholds frozen and the government bringing everyone’s pensions into scope for Inheritance Tax, the figures published with the statement show that IHT will raise even more than was previously expected.

The figures showed that IHT will raise £70.6 billion by 2031, £0.7 billion more than was expected in the Autumn Budget 2025.

Get in touch with our news team by emailing us at webnews@metro.co.uk.

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