Rachel Reeves' Spring Statement - What the changes mean for you

26 March 2025, 14:35

Rachel Reeves said Labour was elected to “bring change to our country, provide security for working people and deliver a decade of national renewal” as she unveiled the Spring Statement - but what do the latest ecomomic changes mean for you?

The Chancellor faced a huge test in the House of Commons today following her October budget - which borrowed more, raised taxes, and angered businesses but failed to create the promised growth.

While is not a full-blown economic statement, she has once again tweaked the economic agenda with the updated Spring Statement.

But with all the talk of growth and forecasts, what do the changes actually mean for the British public? \

Welfare cuts

Today, Ms Reeves she announced new "adjustments" as welfare cuts deepened, confirming the £billion slashing of spending trailed by ministers this week. They will reportedly affect three million people in total.

It comes after a war on benefits erupted last week when Liz Kendall, the Secretary of State for Work and Pensions, unveiled a series of welfare cuts in the House of Commons.

According to an impact assessment, 250,000 additional people - including 50,000 children - will be thrown into poverty as a result of the welfare changes by end of the Parliament.

One measure includes the Universal credit health element will be "cut by 50%" for new claimants and then frozen. This could reportedly affect around 2.25 million people.

In 2029/30 there will be 3.2 million families – some current recipients and some future recipients - who will financially lose as a result of this package, with an average loss of £1,720 per year compared to inflation.

Labour has also tightened requirements for disabled people claiming personal independence payments (Pip).

Around 370,000 current recipients are expected to lose that disability payment upon review,, with 430,000 future PIP recipients who do not set to receive the PIP they would otherwise have been entitled, the impact assessment found.

Universal Credit boost

While Ms Reeves has taken an axe to welfare spending overall, there is one area where benefits claimants won't feel the pinch.

The Universal credit standard allowance will increase from £92 per week in 2025-26, to £106 per week by 2029-30, she announced.

Households '£500 a year better off'

Reeves made the claim her changes will leave households £500 better off.

"The OBR say today that households will be on average over £500 a year better off under this government. That will mean more money in the pockets of working people."

Accountant Paislei Godley has told LBC she’s not sure how the Chancellor has reached the conclusion that households are feeling £500 better off as council tax and the energy price cap continue to rise.

£2bn of investment in social and affordable homes

Up to 18,000 homes will be delivered, with local areas able to bid for new developments across the country, including sites in Thanet, Sunderland and Swindon. 

More than £600m is also being invested to train up to 60,000 more construction workers.

There will be 10 new Technical Excellence colleges across every region of the country "giving working people the chance to fulfil their potential", says Reeves.

No tax rises

The Chancellor stuck firm to her tight fiscal rules of the October Budget - specifically not raising taxes.

But it came as the OBR announced that the UK's tax burden would hit a record share of GDP under Labour.

In October, she announced a National Insurance increase, a freeze on income tax thresholds and a rise in stamp duty.

Most of these changes come into effect next week.

A £3.25 billion fund to invest in innovative projects to 'save taxpayer money'

The Chancellor vowed to “fundamentally reform the British state” as she announced huge cuts to the civil service.

But within that commitment, she said a new "transformation" fund will go towards artificial intelligence (AI) software, support for children in foster care, and a round of civil service voluntary redundancies.

It is thought that up to 50,000 Civil Service jobs could be axed.