Spring Statement 2025: No tax cuts, no surprises – but what next?

There were no tax cuts announced in the Spring Statement, after an eye-watering Autumn Budget six months ago. But is no news good news? Not this time.

Rachel Reeves had already promised no huge surprises ahead of the Spring Forecast, and indeed that is what happened in her second fiscal statement as Chancellor of the Exchequer.

But for the taxpayer, the lack of tax changes was somewhat muted by the slower-than-projected growth and higher-projected interest rates.

This suggests we could be bracing for another round of belt tightening on the tax front in the forthcoming Autumn Budget.

So, what changed?

In real terms, nothing changed. The news after Rachel Reeves’s speech was that there was no news. No fresh tax changes that could affect those saving for retirement this time round.

But the figures the Chancellor presented in the forecast have left a sense of further austerity to come in the air.

After all, the Office for Budget Responsibility (OBR) trimmed the short-term growth forecast from 2% to 1%, and data from the same source suggests that real GDP per person is still below levels from 2022 and not estimated to recover until 2026.

On top of this, inflation is predicted to remain above the Bank of England’s 2% target only by 2027.

Recap of key changes previously announced

Tax threshold frozen until 2028

Inheritance tax threshold frozen until 2030

Business Asset Disposal Relief rates increase to 14% from April

20% VAT on school fees from January

New Spring Statement 2025 key measures

ISAs continue under review

Tax debt collection – additional funding

Increase in late payment penalties

Rise in Home Office fees

What can you do in this backdrop?

No changes doesn’t mean no action. Individuals still have time to benefit from their ISA and pension allowances before the end of the 2024-25 tax yar, ahead of possible restrictions to annual or lifetime allowances in the Autumn.

It’s also worth considering that interest rates and Gilt yields are above target levels, and therefore for it might make sense for some to consider taking up annuities to cover longer-term income needs. Given the reform being made to pensions to include them in an individual’s estate for inheritance tax calculations from 2027, making use of a steady income through annuities might be an attractive option for some.

It’s worth noting that, even though the Chancellor didn’t touch on Individual Savings Accounts (ISAs) in her speech, the government is looking at reform options that “get the balance right between cash and equities to earn better returns for savers”. This means we could see a change of ISA rules down the line.

Positioning for the retirement of your dreams

With little wiggle room in the economy, Reeves has raised concerns of more austere tax impositions for the UK in years to come.

The picture looked better back in October, when the Reeves announced her first Budget. So, even though there were no actual changes to tax policies, it’s important to make sure you’re best positioned to leverage your finances in the best possible way.

Although this looks different for everyone, looking after your finances generally includes optimising your tax strategies, validating your wealth plans through a professional cashflow model, and leveraging a comprehensive wealth management system that looks at all aspects of your finances.

If you’re looking for help navigating your wealth strategies – whether it’s by seeking reassurance that you’re in the right track for retirement or by looking for assistance in managing your financial affairs – talk to us and we’d be happy to help you navigate any uncertainty.