Spring Forecast 2025: what financial advisers could expect 

The 2025 Spring Forecast will take place on Wednesday 26 March.  

The statement will see chancellor Rachel Reeves provide an update on the UK economy.  

Additionally, the OBR will publish its forecast on the UK economy, including estimates on the cost of living for households and if it thinks the government will adhere to its rules on borrowing and spending. 

The Spring Forecast will not have the same level of announcements and changes as the Autumn Budget, with the chancellor committed to “one major fiscal event a year” and already ruling out further tax rises.  

However, with slow economic growth, prices remaining higher for longer, and world events indirectly impacting overall performance, changes may still be introduced that could affect individuals and businesses.  

What are the speculated changes in the 2025 Spring Forecast? 

Rumours are already swirling about what the upcoming Spring Forecast could include, with government spending cuts and individual savings account (ISA) changes gaining the most attention.  

Here’s a breakdown of some of the speculated announcements and the impact they could have on consumers. However, it’s worth remembering these are not confirmed and could still change ahead of 26 March.  

Changes to cash ISAs 

It’s rumoured the chancellor may reduce the £20,000 tax-free annual limit in cash ISAs, down to a speculated £4,000 to encourage more people to invest their savings in stocks and shares and boost economic growth.  

This will have huge implications for consumers, who would not be able to shelter as much money tax-free.  

Additionally, for banks and building societies that use cash ISAs as capital for lending, this could lead to reduced mortgage and loan availability for consumers.  

Lifetime ISA review 

The Treasury Committee has launched a review into whether the lifetime ISA is still fit for purpose. The review will examine annual contribution limits, the 25% withdrawal limit, and whether the property price cap should be raised from £450,000 or removed entirely.  

With house prices soaring, changes to the lifetime ISA could be welcomed by first-time buyers, as higher limits and price caps may help them get on the property ladder.  

Extended income tax threshold freeze 

The current income tax threshold freeze is set to end in 2028, after which thresholds will rise in line with inflation.  

However, it’s rumoured that the freeze will be extended. This will push more people into higher tax brackets should their wages rise.  

Effectively, this is a stealth tax on consumers. To avoid it, they require careful and clever financial planning, ideally with the help of a financial adviser.  

National insurance relief 

Employer’s national insurance (NI) is set to increase from April 2025, as per the 2024 Autumn Budget.  

This unpopular change will result in higher costs to businesses, which could be passed on to consumers.  

It’s speculated the chancellor may announce some form of relief ahead of the proposed changes, which could reduce the overall impact.  

Inheritance tax gifting extension 

Many changes were announced for inheritance tax (IHT) during the Autumn Budget, and it’s suggested that it’s not immune in the Spring Forecast.  

Recent speculation suggests IHT gifting rules could be extended to 10 or even 15 years. Currently, people can give assets tax-free if they live at least seven years following the gifting. By raising this to 10 or 15 years, more people will have to pay tax on inherited gifts.  

Should this change come into effect, advisers should be ready to review estate plans with their clients and find suitable ways to reduce inheritance tax.  

Welfare cuts 

One of the biggest talking points ahead of the Spring Forecast is the expected cuts to welfare spending, with the chancellor stating the current system “lets down taxpayers because it’s costing too much.”  

The speculated reform has already caused a backlash, with charities and opposition politicians warning of the catastrophic impact it could have on the most vulnerable.  

For clients, either individuals or charities helping the vulnerable, who rely on welfare, this could have a huge impact on their finances and require expert guidance and support.  

How can advisers support their clients? 

Government financial announcements provide advisers with the opportunity to highlight their services and ultimately deliver greater value for their clients. 

In the week following the 2024 Autumn Budget, Unbiased saw over 4,400 enquiries through the platform. This surge highlights the urgent need consumers have for financial advice when changes are announced. 

While the Spring Forecast will not introduce the barrage of changes witnessed in the Autumn Budget, it may still create uncertainty among consumers.   

Advisers can provide the stability consumers crave.  

Staying up to date on the speculated changes and their impact will help you do this.  

By taking a proactive approach and reviewing your clients’ portfolios and plans prior to the announcement, you can be prepared to deal with any queries and make necessary changes.  

Alongside ensuring your clients are looked after, you should also be prepared for new consumers seeking financial advice.  

For many, it may be their first time working with a financial adviser, so it’s important to go at their speed and provide personalised advice so they can achieve their best outcomes. 

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