Spring Statement Summary
Chancellor Rachel Reeves delivered the UK’s Spring Statement on March 26, 2025, outlining measures aimed at stabilizing public finances and fostering economic growth. The statement introduced significant spending cuts, particularly in welfare and public services, alongside targeted investments in defence and infrastructure.Bishop Fleming+12Wikipedia+12The Guardian+12Wikipedia+3The Guardian+3Research Briefings+3
Key Announcements:
- Welfare Reforms: The government plans to reduce welfare spending by approximately £4.8 billion annually by 2029-30. This includes stringent assessments for Personal Independence Payment (PIP), the elimination of Universal Credit health assessments by 2028, and merging jobseeker benefits. These changes are projected to increase relative poverty for 250,000 individuals, including 50,000 children. Financial Times+1Financial Times+1The Sun+1The Scottish Sun+1
- Public Sector Cuts: A reduction of £3.6 billion in day-to-day departmental spending is planned, with at least 10,000 civil service positions to be eliminated to reallocate funds to frontline services such as policing. Financial Times+2The Sun+2The Sun+2
- Defense Spending: An additional £2.2 billion will be allocated to the Ministry of Defence in the next financial year, contributing to a planned increase of defense spending to 2.5% of GDP by 2027. GOV.UK
- National Living Wage: The National Living Wage will rise by 6.7% to £12.21 per hour starting April 1, 2025, benefiting approximately three million workers with an annual pay increase of £1,400. Bishop Fleming+2The Scottish Sun+2The Scottish Sun+2
- Housing and Infrastructure: Planning reforms aim to boost housebuilding to 305,000 homes annually by 2029, with capital spending increasing by £2 billion per year to support infrastructure projects. Financial Times
Economic Forecasts:
- Growth: The Office for Budget Responsibility (OBR) forecasts economic growth of 1% in 2025, rising to 1.9% in 2026. The Sun+2Latest news & breaking headlines+2Financial Times+2
- Inflation: Inflation is projected to average 3.2% in 2025, decreasing to 2.1% in 2026. Latest news & breaking headlines+1Financial Times+1
- Public Finances: The UK is expected to transition from a deficit of £36.1 billion in 2025-26 to a surplus of £9.9 billion by 2029-30, with the tax burden reaching a record 37.7% of GDP by 2027-28. Latest news & breaking headlines+1Financial Times+1
Political and Social Reactions:
The proposed welfare cuts have elicited criticism from charities and some Labour MPs, who express concern over the potential impact on vulnerable populations. The Resolution Foundation warns that these cuts could lead to “recession level” declines in living standards for lower-income households, with disposable incomes dropping by an average of 3%, or £500, over five years. The Sun+6Financial Times+6Wikipedia+6Financial Times
Chancellor Reeves emphasized the necessity of these measures to ensure fiscal stability amid global uncertainties, stating that the government’s choices are aimed at “delivering security for our country and security for working people.”
Best Buy Tables
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First Time Buyers Fixed Rates
| Lender | Rate | LTV | Rate Type |
| Nationwide | 5.19% | 95% | 2-year fixed |
| Barclays | 4.74% | 90% | 2-year fixed |
| Virgin | 5.03% | 95% | 5-year fixed |
| Virgin | 4.59% | 90% | 5-year fixed |
Remortgage Fixed Rates
| Lender | Rate | LTV | Rate Type |
| TSB | 4.34% | 75% | 2-year fixed |
| Halifax | 4.13% | 60% | 2-year fixed |
| NatWest | 4.19% | 75% | 5-year fixed |
| Nationwide | 4.04% | 60% | 5-year fixed |
| Santander | 4.67% | 75% | 10-year fixed |
Buy to Let Purchase Rates
| Lender | Rate | LTV | Rate Type |
| Santander | 4.29% | 75% | 5-year fixed |
| Kensington SPV | 4.89% | 75% | 5-year fixed |
PRODUCTS CORRECT AS OF 28.03.25
ALL MORTGAGE RATES ARE SUBJECT TO CREDIT STATUS, INCOME AND AFFORDABILITY.
ARRANGEMENT FEES AND EARLY REPAYMENT CHARGES MAY APPLY TO THESE PRODUCTS THESR ARE FOR ILLUSTRATIVE PURPOSES OF RATES. PLEASE CONTACT AN ADVISER FOR A RECOMMENDATION TO MEET YOUR CIRCUMSTANCES. ALL VIEWS IN MARKET COMMENTARY ARE THE PERSONAL OPINIONS OF THE AUTHOR.
YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
