Spring Statement 2025: key takeaways for financial advisers

What is the Office for Budget Responsibility’s outlook? 

Additionally, today, the Office for Budget Responsibility (OBR) published its forecast for the UK economy.  

When looking at UK economic growth, the chancellor announced the OBR has halved its forecast for UK growth this year from 2% to 1%, numbers Reeves stated she was “not satisfied with.” 

However, it was also announced that growth over the following years will be faster than expected: 

• 2025: 1%, down from 2.0% forecast in the Autumn Budget  

• 2026: 1.9%, up from 1.8% forecast in the Autumn Budget 

• 2027: 1.8%, up from 1.5% forecast in the Autumn Budget 

• 2028: 1.7%, up from 1.5% forecast in the Autumn Budget 

• 2029: 1.8%, a new forecast 

The OBR now forecasts inflation will average 3.2% this year, significantly higher than the 2.6% forecast during the Autumn Budget.  

In 2026, it is forecast to drop to 2.1% and remain at around 2% from 2027 onwards.  

Additionally, Reeves stated that the OBR now expects households to be £500 better off annually by 2030 under the Labour Government.  

What are the key announcements in the 2025 Spring Statement?  

During the Spring Statement, chancellor Rachel Reeves provided an update on the UK economy.  

While the Spring Statement did not have the same level of announcements and changes as the Autumn Budget in October 2024, with the chancellor committed to “one major fiscal event a year,” there were several key announcements made, including: 

No tax increases 

Early on in her statement, the chancellor stated it would not include any tax increases, with Reeves stating the announced numbers would be “broadly unchanged from the autumn.” 

This is a welcome relief to many consumers who, off the back of swirling rumours in the lead-up to the Spring Statement, were concerned about changes to inheritance tax gifting rules, an extended income tax threshold freeze, and changes to cash individual savings accounts (ISAs)..  

Instead, at the top of her statement, Reeves reiterated her commitment to delivering a “decade of national renewal” and “prosperity for working people” and cracking down on tax evasion.  

It was projected that the UK would see £7.5 billion in savings by cutting down on tax evasion, with a commitment to increase the number of tax fraudsters charged each year by 20%.  

Continued commitment to “going further and faster” 

The published Spring Statement 2025 announces a number of initiatives under its effort to go “further and faster to unlock investment and unblock barriers to growth.” 

These include: 

• Looking at reforms to ISAs that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission. 

• In the summer, the government will publish an interim report that sets out a clear direction of travel for the business rates system. 

• Working with leading entrepreneurs and venture capital firms on how its policies can ensure that the UK is the best place in the world to start and grow a business. This will include a series of roundtables over April.  

• Working to ensure the new residence-based regime in the tax system is internationally competitive and continues to focus on attracting the best talent and investment to the UK.  

Headroom restored 

The OBR has said the government’s headroom has been restored.  

According to the BBC, this headroom refers to how much leeway the government has to cut taxes or increase spending while still sticking to its self-imposed rules. 

This has been achieved by meeting the investment rule two years early and by saving the money which was being eaten up by the rising cost of borrowing.  

The net financial debt is now forecast to be 82.9% of gross domestic product (GDP) in 2025-26 and 83.5% in 2026-27. It will then fall to 82.7% in 2029-30, providing the government with £15.1 billion by the end of the decade.  

Welfare reforms 

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

During her statement, Reeves declared that welfare reforms would save £3.4 billion. Her announced changes included: 

• Universal Credit standard allowance will increase from £92 per week in the financial year 2025/26 to £106 per week by 2029/30. 

• Universal Credit health element will be cut by 50% and then frozen for new claimants. 

Alongside these welfare reforms, Reeves also announced investment in areas such as affordable homes and helping people get back to work, committing £2 billion and £1 billion, respectively.  

Impact of “global uncertainty” 

One of the key talking points of the Spring Statement was around defence spending, which will increase to 2.5% of GDP.  

As part of this increase, the Ministry of Defence will receive £2.2 billion next year to act quickly in a “changing world.” 

Additionally, Reeves stated the increase in defence spending will be spent on new technologies, advanced manufacturing, and more business and skilled job opportunities, helping the UK become a “defence industrial superpower.” 

How can advisers support their clients?  

While today's announcement will not have the same impact as the Autumn Budget, the UK is still in a period of economic uncertainty.  

This uncertainty provides financial advisers with the opportunity to highlight their services and ultimately deliver greater value for their clients.   

It’s important to remain up to date on all changes and be ready to discuss their implications with your clients. Taking a proactive approach here, such as contacting clients to schedule time to review the changes, can be hugely beneficial.  

By reviewing portfolios, revising strategies, and using your expertise and skills, you can help your clients make informed decisions.  

Additionally, many people will seek out financial advice during times of uncertainty.  

For a lot of these people, it may be their first time working with an expert financial adviser. Recent Unbiased research found that 59% of leads through Unbiased had never used a financial adviser before.   

So, it’s important to be aware of this. To help make the process easier, speak to new prospects on their level, avoid jargon, be reassuring, be upfront about fees and set expectations. People want personalised advice from someone they can trust.    

Want to work with Unbiased?  

Following the 2024 Autumn Budget, Unbiased saw over 4,400 enquiries through the platform, highlighting the urgent need consumers have for financial advice when changes are announced.  

Unbiased Pro will help you grow your firm by matching you with suitable clients, delivering them straight to your inbox, and giving you all the tools you need to convert leads into loyal customers.