Spring Statement 2025: Key insights and implications for financial planning
In the lead up to the Spring Statement, there had been suggestions that the Chancellor would cut the amount people could hold in cash within an Individual Savings Account (ISA) where as much as £20,000 a year in cash can be invested.
No changes were announced other than documents released alongside the speech in the commons revealing that the government was looking at reforms to ISAs. In their words “to get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission”.
The government also confirmed that ISA limits will remain at 2023-24 levels up to and including 2029-30. We could, however, expect Reeves to return to the house in autumn for more of a ‘Budget’ as they have committed to one major fiscal event a year and so we may see more impactful changes then.
Labour reaffirmed their commitment to the ‘stability rule’ which aims for spending to be met by tax receipts by 2029/2030. They continue to focus on public services and government efficiencies, with a spending review to take place in June to establish department budgets. Ongoing reform of the welfare system and plans to crack down on tax evasion and fraud are part of their strategy to achieve this goal.
In view of the potential reforms, this is an apt opportunity to highlight that there are a few working days remaining of this tax year. Where affordable to do so, now is a critical time to maximise allowances whilst they remain available.
Below is a reminder of the allowances available to you and accompanying articles for more detail.
| Allowance | Amount | Benefits |
| ISA allowance | £20,000 |
Tax free growth and access. |
| Junior ISA | £9,000 | Tax free growth and intergenerational planning. |
| Pension allowance | £60,000 | Tax free growth and uplifts to tax relief on eligible contributions. There are complex rules around pensions so please read this article for more detail. |
| Capital gains tax allowance | £3,000 | This is an allowance you can offset against taxable gains or profits. Please read this article for more detail. |
| Gifting allowance | £3,000 | Falls outside of your estate immediately- and intergenerational planning. Please read this article for more detail. |
Following the Spring Statement, we can reasonably anticipate changes to the planning landscape over the next 12 months. This is most recently highlighted with the changes announced to pensions in the 2024 Autumn Statement, with pensions becoming exposed to Inheritance Tax from April 2027.
Consistency around utilising allowances while they are available may prove invaluable to your plan over the longer term. There are a few more days for us all to take stock of our individual positions and make use of allowances suitable to us, ahead of the 6 April.
We would always suggest seeking professional advice as this is not one size fits all and allowances which suit others may not be appropriate for you. One thing is certain, we have a finite amount of time to make a difference to your financial plan so do contact us today.
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