Spring Statement 2025: Winners and Losers
Amidst growing uncertainty over the conflict in Ukraine and the impacts for European security alongside rising instability caused by Donald Trump’s tariff war, the Spring Statement 2025 built on the government’s announcements last autumn with a renewed commitment to financial stability.
In laying out the Spring Statement, Rachel Reeves said: ‘the global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies.’
She added that the UK was ‘one of the world's largest economies, an ally to trading partners across the globe and a hub for global innovation. These strengths and the progress that we have made so far mean that we can act quickly and decisively in a more uncertain world to secure Britain's future and to deliver prosperity for working people.’
Reeves' last announcement, made in October 2024, included boosts to minimum wages, an increase in the state pension and a reduction to the headline rate for National Insurance. Now, however, the government has opted for an alternative strategy with major initiatives aimed at courting homeowners and small business owners, among others.
So, ultimately, who wins and loses? Let's explore which groups could be most affected by these changes.
Winners
Builders and property developers
The Chancellor made a firm commitment to solving the housing crisis. Changes to the National Planning Policy Framework alone are slated to help build over 1.3m homes in the UK over the next five years.
Education Secretary Bridget Phillipson also pledged more than £600m to train 60,000 construction workers and address widespread skills shortages in the construction sector. This measure and others could benefit home builders, architects, town planners and other associated professions through government aid and streamlined planning permission regulations.
Property owners
Reeves’ planning reforms aim to boost house building to a 40-year high and stimulate more activity in the housing market. The Office for Budget Responsibility (OBR) predicts these reforms could permanently increase real GDP by 0.2% in 2029/30, translating to an additional £6.8 billion for the economy.
That kind of economic stability could drive increases in property values and benefit homeowners looking to sell in the next five years.
The defence industry
Defence spending will increase to 2.5% of GDP, putting an extra £6.4bn into the sector by 2027. This uptick will be funded by cuts to the overseas aid budget, bringing it down to 0.3% of GDP.
The Chancellor suggested this would save approximately £2.6bn in day-to-day spending in 2029/30 and help to fund more capital investments. Expect a boost to defence sector growth in the years to come.
Certain tech companies
Technology companies in the defence sector stand to benefit significantly from Reeve’s plans. The Ministry of Defence will spend at least 10% of its equipment budget on cutting-edge technology thanks to a dedicated £400m innovation pot.
Elsewhere, Reeves pledged to up investments into artificial intelligence (AI) to modernise government services and increase efficiencies.
Unemployed young people
The Spring Statement also included a clear message that if young people can work, they should be given the opportunity to do so. The Chancellor unveiled a series of measures designed to help get young people into work, including the establishment of 10 new technical excellence colleges across every region of the country and new opportunities for skills development.
Losers
Benefits claimants
The government plans to reshape the benefits system and focus on getting people into work. The Universal Credit Standard Allowance for a single person aged 25 or over will see a modest increase from £92 to £106 a week by 2029/30.
Offsetting this, however, are planned cuts and freezes to other aspects of Universal Credit. The health element will be frozen for existing claimants until 2029/30. It’ll be reduced to £50 a week for new claimants in 2026/27 and then frozen until 2029/30.
These changes are part of a broader strategy to reduce welfare spending as a share of GDP. The government emphasises that the reforms will make the system more sustainable while pushing more people into employment. However, for many current and potential benefit recipients, this means navigating a more challenging landscape with potentially reduced financial support.
Healthcare workers
Reeves reiterated her commitment to dismantle NHS England, stating: ‘the Prime Minister set out plans to abolish the arms-length body NHS England and ensure that money goes directly to improving the service for patients [...] the Health Secretary is driving forward vital reforms to increase NHS productivity, bearing down on costly agency spending to save money so that we can improve patient care.’
Proponents say the decommissioning will remove inefficiencies and unnecessary bureaucracy, but others claim the measures could result in the loss of up to 30,000 jobs.
Civil service workers
The Chancellor outlined significant reforms to reduce the size and cost of the civil service. The government will introduce voluntary exit schemes to allow employees to leave their positions voluntarily, reducing overall staff numbers without mandatory redundancies.
Additionally, the government will invest in AI to increase efficiency and reduce civil service running costs by 15% (amounting to £2bn in savings) by the end of the decade. While Reeves framed these changes as part of a broader strategy to create a leaner state, they could represent a threat to job security for civil service workers.
What’s next?
The 2025 Spring Statement included several key initiatives to level up Britain's defences, address the housing crisis and crack down on taxation fraud.
The Chancellor appeared confident that these measures combined with agile responses to global instability would drive growth and see the average British household £500 a year better off than this government compared to the last.
It’s clear that appetite for economic and policy reform is strong on the Labour frontbenches. These changes combined with the raft of measures announced last October are shifting the way many people approach their finances.
Feel free to get in touch if you have any concerns about the impact of these changes on your situation or if you want to explore the opportunities they might create.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Approved by The Openwork Partnership on 26/03/2025
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