Three ways the Spring Statement could affect you and your money
- Published
Talk of growth forecasts and self-imposed financial rules may feel very distant from you and your life, but the Spring Statement could affect both your job and your money.
Here's what it could mean for you.
1. Benefit changes
If you are on benefits, you could be directly affected.
The changes to the benefits system, announced last week, will see some people lose support from next year, although universal credit payments are set to rise from next April.
This means:
If you claim Personal Independence Payments and do not qualify when the criteria are tightened, then you are likely to be hardest hit. Some 370,000 people are expected to lose their entitlement altogether, and others will receive less than they expected. The average loss is £4,500 a year
Even if you are not affected by the Pip changes, you may still lose out. Overall, by 2029-30, some 3.2 million families - some current recipients and some future recipients - will see cuts, with an average loss of £1,720 per year once inflation is taken into account
If you are on universal credit, then you could benefit. A total of 3.8 million current and future claimants will be £420 a year better off on average by 2029-30, after taking into account the impact of inflation
Other changes to the welfare reforms also mean less money than you may have expected.
For example, the government had said there would be a rise in the standard allowance for universal credit for 6.5 million people.
It will now rise to £106 a week, for a single claimant aged over 25 in 2029-30, rather than the £107 previously billed.
The health element of universal credit, which is paid if your ability to work is limited, was set be halved for new claimants to £50 a week in 2026-27, and will now be frozen thereafter.
Ministers have said that existing claimants will be affected too with their entitlement frozen at £97 a week until 2029-30.
2. Living standards and household bills
The Spring Statement doesn't come in isolation. Next week, a series of household bills will rise.
From 1 April, you will pay more for water, energy and your council tax.
However, if you're over 21 and on the minimum wage then your hourly rate will go up to £12.21 an hour, from the current £11.44.
Nonetheless, the rising cost of living has pushed many of you to your financial limit.
And now the prices you pay are expected to rise at a faster pace this year than previously thought.
Inflation - is expected to average 3.2% this year, according to the government's official forecaster, the Office for Budget Responsibility, before falling to 2.1% in 2026 and then 2% from 2027. The government's target is 2%.
As a result, interest rates, which are used to try and control the rate of rising prices, are expected to remain higher than previously thought.
Overall, however, living standards are expected to improve.
This is measured by real household disposable income which is expected to rise by just over 2% between now and 2030. That means on average you are expected to be £500 a year better off by 2030. However, this is relatively small by historical standards.
Remember, these are only forecasts. They may be wrong and are subject to change.
There's likely to be more speculation about the future of tax-free allowances in Individual Savings Accounts (Isas). The government says it is "looking at options for reforms" to encourage investing money.
3. Jobs and services cut or created
Forecasts about the general state of the economy will also influence the decisions the chancellor chooses to make and this could directly affect you.
For example, official forecasts about economic growth this year have been halved from 2% to 1%, but are higher in subsequent years owing, in part, to the government's housebuilding programme.
A spending review in June will outline how much each government department has to spend, but the Treasury now has a better idea of how much it has to work with.
This could lead to job cuts and, for example, any cuts to local government funding could increase the cost of services you use, such as garden waste bins or parking.
On the flipside, investment by the government - such as with defence projects - could create new jobs.