Spring Statement 2025: Significant changes to look out for in the months ahead

Despite no major tax changes in today’s Spring Statement, measures announced in last year’s Autumn Budget are set to come into effect.

Today’s Spring Statement was void of any major tax changes as the Chancellor of the Exchequer, Rachel Reeves, attempted meet her “non-negotiable fiscal rules” while keeping the promises made in the Labour Party manifesto.

This was to be expected “given the scale of the Autumn Statement”, according to Chris Bull, Spokesperson at chartered financial planners, Kellands. Nevertheless, the Chancellor was faced with the difficult decision of either raising taxes or making spending cuts in order “to balance the books”, he explained.

“The Chancellor elected to keep her promise and refrained from raising taxes,” Bull summarised, adding that the welfare budget suffered the brunt of spending cuts, which are estimated to save £4.8 billion.

However, consumers must still be vigilant and review their finances, with measures announced in last year’s Autumn Budget only about to take effect. Below, find some of the changes to look out for in the coming weeks and months which could impact both personal and business finances.

Temporary Stamp Duty relief to end

With the Chancellor of the Exchequer forgoing the opportunity to extend temporary Stamp Duty relief in both last year’s Autumn Budget and today’s Spring Statement, those looking to move home in the coming months may need to find more money to cover additional costs.

After next Monday (31 March 2025), first-time buyers will be liable for Stamp Duty when purchasing a property worth £300,000 or more (compared to £425,000 currently). Meanwhile, homemovers will see their nil-rate threshold slashed from £250,000 to £125,000.

“Looking ahead, the changes to stamp duty at the start of April are likely to generate volatility in transactions in the near term, as buyers bring forward their purchases to avoid the additional tax,” Robert Gardner, Chief Economist at Nationwide BS, explained earlier this month.

“This will likely lead to a jump in transactions in March, and a corresponding period of weakness in the following months, as occurred in the wake of previous stamp duty changes,” Gardner added.

Indeed, fellow mutual, Skipton BS, reported a 54% increase in people looking to complete their house purchase so far this month compared to March last year – 50% of whom were first-time buyers hoping to save on stamp duty. It revealed that, once the temporary measures end, first-time buyers purchasing a property worth £425,000 will need to budget an extra £6,250 to cover Stamp Duty Land Tax (SDLT).

While it may be too late for those only now considering a house move, Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, encouraged borrowers to search for opportunities to offset their tax burden:

“Buyers who miss the deadline will need to ensure they have some decent savings to pay the SDLT, so mortgages which help borrowers save on the upfront cost of their deal or even offer a generous cashback payment could be more attractive”.

Employer’s National Insurance contribution to rise

A talking point of last year’s Autumn Budget, changes to employer’s National Insurance contributions (NICs), are set take effect next week once the new tax-year begins on 6 April.  This will see the threshold at which businesses become liable for secondary Class 1 NICs reduce from £9,100 to £5,000 per employee per year, while the rate of secondary Class 1 NIC will rise from 13.8% to 15%.

However, the £100,000 threshold for Employment Allowance (which enables businesses to reduce their National Insurance liability) will be removed and the maximum allowance increased so that all eligible employers with NIC bills can lessen their tax bill by up to £10,500.

“Overall, more than half of businesses with NIC liabilities next year will either gain or see no change in their secondary Class 1 NIC liabilities,” the Office for Budget Responsibility (OBR) reported in its Economic and Fiscal Outlook in October 2024. That being said, some 940,000 employers will have their contributions increased, with the OBR stating that “the average employer who loses out will see their tax liabilities increased by around £26,000”.

In order to recoup losses, it’s assumed some businesses will reduce their workforces, lower wages and/or hike prices – all of which could take a toll on the economy.

ISA allowance to be reset

Despite widespread speculation earlier this month that the Chancellor was considering limiting the amount savers can deposit in cash ISAs to £4,000 per tax-year in a bid to encourage more people to invest with a Stocks and Shares ISA, changes to the ISA allowance were absent from today’s Spring Statement.

This means savers can continue to contribute a combined total of up to £20,000 per year across a range of different ISAs; however, time is running out to use up this year’s allowance before it automatically resets once the new tax-year begins next Sunday (6 April).

That being said, ISA reform may well still be on the cards for later this year; the Spring Statement document revealed the Government is “looking at options for reforms to Individual Savings Accounts that get the balance right between cash and equities”.

While Springall acknowledged some savers won’t want to be  “forced to place their hard-earned cash in a pot which could be at risk” she explained that, over the longer-term, “stocks and shares ISAs can outpace cash returns and beat inflation” (although returns are never guaranteed).

Lifetime ISA under review

Many savers are also eagerly awaiting the outcome of a review into Lifetime ISAs (LISAs) after the Treasury Committee launched a probe into whether the savings product is still fit for purpose nine years since its inception.

Despite being a popular vehicle for prospective buyers saving a deposit for their first home, LISAs have come under scrutiny in more recent years for not evolving in line with house price growth and imposing harsh penalties on withdrawals.

“To give this weight, HMRC revealed that penalty charges reached £75.2 million in the 2023/24 tax-year,” said Springall.

Recognising that circumstances can change, she encouraged those considering a LISA to check the terms and conditions before entering any arrangement to make sure they’re eligible for the 25% Government bonus.

“This product might not be suitable for everyone, so it’s wise to compare different savings accounts,” she concluded.