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Against a backdrop of escalating tensions in the Middle East, this year’s Spring Statement focused firmly on the importance of stability, but what exactly does that mean for your finances?
The Spring Statement typically concentrates on how the economy has been doing, looking at GDP growth, inflation, tax, Government spending and borrowing, rather than on new policy announcements. These tend to be reserved for the Autumn Budget, and you can read about the measures that were announced then in our article Autumn Budget 2025: what it means for you.
Mark Campbell, Head of Wealth Proposition at Isio, said: “The Chancellor has been clear that this is not intended to be a major fiscal event, as she has committed to a single annual Budget in the autumn. It is more of an update on the state of the public finances than a platform for significant new tax announcements.
“That said, the absence of new measures should be viewed in the context of what has already been announced. The Budget last November introduced several material changes, including increases to dividend tax, higher car tax rates, the removal of working-from-home expense relief for employees, and reforms to Agricultural and Business Property Reliefs.”
Here’s our rundown of some of the main Spring Statement announcements and a reminder of some of the measures unveiled in the autumn, so you can see how you’re likely to be affected.
Revised economic forecasts
By law, the Office for Budget Responsibility must produce economic forecasts at least twice each fiscal year, usually in spring and autumn, and the Chancellor must respond to both.
The OBR originally forecast growth of 1.4% in 2026, but has revised this down to 1.1%, reflecting global uncertainty and steeper government borrowing costs. It forecasts growth of 1.6% in both 2027 and 2028 (up from 1.5% previously) and 1.5% in both 2029 and 2030.
The Chancellor said she would continue to work closely with the Bank of England to ensure that inflation reaches its 2% target by 2027. Inflation slowed to 3% in the 12 months to January, according to Office for National Statistics data, down from 3.4% in December. Find out more in our article Inflation tumbles to 3%. The OBR has also lowered its inflation forecast for this year predictIng that the Consumer Prices Index measure of inflation will fall to 2.3 % in 2026, down from 2.5 % in its November forecast.
However, this forecast was made prior to the Iran conflict and so may now already be out of date. In the hours prior to the Spring Statement, the cost of government borrowing surged, prompting fears that rising tensions in the Middle East could result in a big jump in energy prices, potentially fuelling inflation and halting further interest rises for now.
This would be bad news for mortgage borrowers hoping to see a reduction in costs, but positive for savers looking for inflation-beating returns. If you’re approaching the end of your existing mortgage deal, it may be worth exploring your options now so you can get an idea of how much your payments might be. Find out more in our article How to get the best mortgage deal in 2026.
Emma Wall, Chief Investment Strategist at Hargreaves Lansdown, said: “The Chancellor was keen to stress the higher growth, lower inflation outlook for the UK in today’s Spring Statement. But markets are listening less to what is happening in the House of Commons and more on the war in the Middle East. Expectations that higher oil prices will flow through to re-inflation have sent yields higher, and cooled expectations for interest rate cuts.
“The market is now struggling to price in even a quarter point cut from the Bank of England’s Monetary Policy Committee. We think this is overly pessimistic but understand the caution.”
Unemployment to peak later this year
Unemployment, which currently stands at a five-year high, is expected to peak later this year at 5.3% and then fall in every year of the forecast period to reach 4.1% by 2030, according to the OBR. The Chancellor’s speech focused predominantly on measures the government plans to take to tackle youth unemployment, but there are currently around three million people who are aged over 50 and under the state pension age and who are not currently in work.
If you’re looking for a full or part-time job, a career change after 50, or to find your purpose post-retirement, we have lots of job and volunteering roles available on our site with age-diverse employers and organisations.
No changes to frozen tax thresholds
Although the Spring Statement was clearly badged by the Chancellor as not a fiscal event, the continued freezing of tax thresholds until 2031 is quietly pulling more people into higher bands as wages rise, boosting revenues without headline-grabbing tax hikes.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Income tax and National Insurance thresholds will be frozen until 2031, and between now and then, every pay rise will mean you pay more tax and creep ever closer to crossing a tax threshold. It means some people will be pushed over the personal allowance and be forced to pay income tax and National Insurance for the first time, while others find themselves facing higher or additional rate tax.
“At that point, it’s not just more income tax you have to worry about, but potentially higher rates on everything from dividend tax to capital gains tax, and a shrinking personal savings allowance.”
If you’re looking to reduce the amount of income tax you pay, it’s worth checking you’re on the right tax code, as you may be able to get a refund of income tax payments if you’ve paid too much. Sometimes new employees are put on emergency tax codes when they change jobs, meaning they’ll be charged at a higher rate.
If you’re married, you might be able to use the Marriage Allowance to reduce the overall amount of tax you pay, by transferring up to 10% of your personal allowance to your partner. The personal allowance is £12,570 in the 2025/26 tax year and in the 2026/27 tax year, which means you can transfer £1,260. This gives your partner an increased personal allowance, and reduces their tax bill. Find out more in our article Marriage Allowance explained.
Pensions and pensioner benefits
The main statement of note on pensions in the Spring Statement was the Government reaffirming benefit upratings and reiterating that the full new State Pension will rise by 4.8% from April, taking it from £230.25 a week to £241.30. This represents an annual increase of £575. However, the amount you’ll personally receive will be based on your National Insurance Contribution record.
The full basic State Pension is currently £176.45 a week, and this will increase to £184.90 at the start of the new tax year on April 6, adding £440 onto annual payments. Learn more in our article What will the State Pension be in 2026?
As expected, there were no big announcements affecting workplace or personal pensions. However, Rachel Reeves has previously announced that from April 2027, pensions will no longer be able to be passed on free of inheritance tax. You can find out more about these changes and how they might affect you in our article Inheritance tax and pensions: what’s happening in 2027.
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Mike Ambery, Retirement Savings Director at Standard Life, said: “For pension policy a notable feature of this Statement has been what was not announced. One welcome aspect has been the absence of speculation around pension reliefs and allowances or talk of structural reform.
“Over the past two years, repeated conjecture about potential changes has not helped people’s confidence and trust in long-term saving. Stability matters, and avoiding another cycle of uncertainty later this year would be welcome for both individuals and employers planning ahead.”
No new changes were announced to Pension Credit, Winter Fuel Payment or disability benefits. However, with public finances under pressure, these and other areas may face scrutiny in future Budgets. Learn more in our article Over 60s benefits: Understanding your entitlements and Benefits for over 50s: what you could be entitled to.
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