Spring Statement 2025: Key outcomes

The UK Chancellor Rachel Reeves delivered the 2025 Spring Statement amid a backdrop of global economic uncertainty, rising borrowing costs, and continued efforts to stabilise public finances. With the Office for Budget Responsibility (OBR) providing a fresh economic forecast, the government reaffirmed its commitment to fiscal discipline while outlining measures aimed at fostering economic growth, supporting businesses, and ensuring financial security for individuals.

Our review of the Spring Statement explores the main announcements. We take a closer look at the government’s plans for the economy and what this means for your finances or business.

Key summary

1. Taxation and wealth management

Despite speculation, the Chancellor did not announce new tax increases. Inheritance tax (IHT) remains unchanged, but further tax planning scrutiny is expected. Capital Gains Tax (CGT) and dividend tax thresholds also remain unchanged. 

The Chancellor reaffirmed the government’s commitment to reducing tax avoidance and evasion, announcing a significant investment in HMRC’s enforcement capabilities. This includes a 20% increase in tax fraud prosecutions, with the government aiming to raise an additional £1 billion per year through stricter compliance measures. 

Additionally, while no immediate changes were made to CGT or dividend tax, ongoing discussions within the Treasury suggest that these areas could be subject to reform in future budgets. 

2. Pensions

Despite industry speculation that Reeves may provide further detail on upcoming pension reforms, the current pension tax relief system remains unchanged, with pensions continuing to offer valuable tax benefits.

3. Cost of living and public services

While the Spring Statement did not introduce direct cost-of-living relief measures, the government emphasised its focus on public sector efficiency improvements. This means that while overall spending on healthcare, education and essential services remains protected, there will be greater scrutiny over how public funds are utilised.

From a macroeconomic perspective, the OBR’s forecast suggests that inflation is expected to return to the government’s 2% target by 2027. This could lead to a more stable interest rate environment, reducing borrowing costs.

4. Corporate taxation and business reliefs

In a move welcomed by businesses, the Chancellor confirmed that corporate tax rates will remain unchanged. This provides a degree of stability for companies planning their long-term tax strategies.

However, increased HMRC scrutiny means that businesses, particularly those with complex financial structures or international operations, should expect stricter compliance checks. Enhanced enforcement measures are likely to focus on transfer pricing arrangements, offshore holdings, and tax-efficient corporate structures.

Additionally, the government announced a £3.25 billion investment in public sector transformation, which may create opportunities for private sector businesses to partner with the government on efficiency projects.

5. Business investment and growth

A key focus of the Spring Statement was stimulating private sector investment, particularly in infrastructure, defence, and high-growth industries. A major highlight from the Spring Statement was the expansion of the National Wealth Fund, which will allocate additional capital to strategic industries such as technology, renewable energy, manufacturing and defence.

The government also introduced reforms to planning and infrastructure regulations, which the OBR estimates will increase UK GDP by 0.6% over the next decade. These changes aim to accelerate large-scale development projects, benefiting property developers, construction firms, and institutional investors.

6. Employment and workforce policies

The government announced major welfare reforms aimed at increasing workforce participation, particularly targeting long-term sickness benefits. This aligns with the broader strategy of reducing reliance on welfare and encouraging economic activity.

To address skills shortages, the government has allocated £600 million to technical and apprenticeship programmes, with a goal of training 60,000 new workers in construction and technical trades. Businesses in sectors experiencing labour shortages should explore opportunities to engage with these training programmes to build a more skilled workforce.

What next?

While the Spring Statement provides an update on the health of the nation's finances, the 2024 Autumn Budget had a more widespread impact on personal finance and businesses.

For a refresh of these changes, see our summary of the key changes announced in the Autumn Budget: Autumn Budget 2024: Key Outcomes | Arbuthnot Latham

If you would like additional information or wish to explore how these measures might impact your finances or business, please contact your banker for a more in-depth discussion, or find out more about becoming a client.