What Does the Spring Statement Mean for Your Family and Their Finances

Today’s Spring Statement update delivered by Chancellor Rachel Reeves reflects the challenging economic backdrop faced by families and individuals across the UK. Technically not a formal Budget, this fiscal update set out Labour’s priorities and the steps taken to shore up the public finances, tackle inflation, and restore economic stability.

From a financial planning perspective, there are both reassuring and concerning signals for households trying to secure their financial futures.

Treading a Fine Line Between Stability and Growth

The Chancellor was clear in her message: stability comes first. With borrowing costs elevated globally and growth forecasts downgraded, the government’s commitment to balancing the current budget by 2029/30 provides some comfort that public spending is being reined in. Encouragingly, steps announced today restore the UK’s fiscal headroom, turning a projected deficit into a surplus by the end of the decade.

For families, economic stability is vital. As planners, we’ve seen first-hand how uncertainty affects confidence around big decisions, buying a home, saving for retirement, or supporting children through education. A credible plan to reduce debt and keep inflation under control is welcome, particularly after the economic turbulence of recent years.

 

Welfare Reform and Its Impact on Vulnerable Households

Among the welfare reforms announced, changes to Personal Independence Payment (PIP) stand out as particularly significant, especially for elderly and disabled individuals. PIP currently supports more than 3.6 million people living with long-term physical or mental health conditions, helping cover the additional costs of daily living and mobility challenges.

Under the government’s new proposals, assessments for the daily living component of PIP will be tightened from November 2026. The scoring system, which determines eligibility based on how easily individuals can carry out basic tasks like washing, dressing, and preparing food, is changing. Claimants will now need to score at least four points for one activity to qualify for support, meaning those with less severe difficulties may no longer be eligible.

According to the Office for Budget Responsibility, around 800,000 people could be affected by this change. While the mobility component remains unchanged, the government is also planning more frequent reassessments, adding further uncertainty for many. Only those with the most severe and permanent conditions will be spared repeated reviews.

For families supporting elderly or disabled loved ones, this reform could have a significant impact. PIP is a vital, tax-free benefit that is unaffected by income or savings, often forming a cornerstone of financial planning for vulnerable individuals.

As planners, we would strongly urge those affected to review their future care funding and explore alternative support options.

 

 

Disposable Income on the Rise, but Will Households Feel It?

On a brighter note, the Chancellor pointed to growth in real household disposable income, forecasting that families will be, on average, £500 a year better off. This is largely down to stronger wage growth and falling inflation, with the government targeting a return to the 2% inflation benchmark by 2027.

For those with mortgages, recent interest rate cuts and the prospect of further easing from the Bank of England offer some relief. However, with the cost of living still high, many households in the Cotswolds and beyond will likely continue feeling the squeeze, particularly when it comes to housing costs and energy bills.

 

 

Addressing Long-term Challenges

One of the standout elements of the update was the focus on housing and skills. Ambitious planning reforms are expected to deliver a 40-year high in-house building, alongside training 60,000 new construction workers. For some areas in the UK where housing affordability is a long-standing concern, this could ease pressure in the longer term.

That said, new homes take time to deliver. In the short term, the market remains challenging for first-time buyers, with demand still far outstripping supply. Families considering helping children onto the property ladder may find it increasingly important to plan ahead, utilising tax-efficient savings vehicles like ISAs or exploring intergenerational gifting strategies.

 

No New Tax Increases, But a Stronger Crackdown on Evasion

A notable feature of today’s announcement was the absence of further tax rises, a relief for many already grappling with high personal tax burdens. However, the government’s emphasis on tackling tax avoidance and evasion, raising an extra £1 billion, sends a clear message that scrutiny is increasing.

While this crackdown rightly targets fraudsters, it also serves as a timely reminder of the importance of proper tax planning. Ensuring your affairs are structured efficiently and compliantly remains key, particularly for business owners, landlords, or those with complex estates.

 

What Next for Families and Investors?

Ultimately, this Spring Budget was less about giveaways and more about rebuilding trust in the country’s finances. For families, the path ahead remains finely balanced. There are signs of improvement, wages rising, and inflation easing, but there are also headwinds, particularly for those navigating benefit changes or supporting younger generations with housing.

As always, at Wise Investment, our advice is to plan proactively. Whether it’s reviewing your pension contributions, rethinking your savings strategy, or ensuring your estate plans remain tax-efficient, now is the time to revisit your financial goals.

In uncertain times, a clear plan can offer the peace of mind every family deserves.

 

By Joseph Cooper, Chartered Financial Planner, Wise Investment