Following the Chancellor's Spring Statement, Quilter's experts share their reactions and insight.
Chancellor leaves herself with miniscule headroom, as OBR provides little optimism
Lindsay James, investment strategist
“Today’s Spring Statement confirmed what has long been known about the UK economy – growth is weak and the public finances are in a hugely precarious situation. Without taking action today, Rachel Reeves would have broken her fiscal rules. But even with the tweaks announced the fiscal headroom that she has to play with going forward is not only miniscule, but risks being wiped out by the Autumn Budget given the ongoing pressures on the UK economy in addition to the growing threats to global trade. This caused bond yields to spike briefly, but these appear to have since settled once again.
“The Office for Budget Responsibility has also slashed its growth forecast in half, joining a long list of organisations to have already done so. Growth for 2025 will now just be 1%, and climb no higher than 1.9% in any year between now and the end of the decade. While these figures suggest the UK economy will continue to experience sluggish growth, even those figures are a potential best-case scenario as many others have forecast significantly worse. The Chancellor was keen to tout pro-growth planning policies and increased spending in defence, but frankly many of these policies will not produce the goods any time soon.
“Furthermore, the OBR’s forecast that inflation will average 3.2% this year and not return to target sustainably until 2027 will provide households and businesses with little comfort. We still do not know the full extent of the USA’s tariff regime, and should Donald Trump decide to be even more aggressive on this front than he already has been, then inflation at 2% becomes somewhat of a pipe dream.
“That said, today’s Spring Statement did not come attached with the substantial spending cuts some predicted. Cuts to government spending now mean real spending increases of 1.2% rather than the 1.3% that was planned, and is better than many thought possible. It does appear Reeves has found the necessary cuts without either increasing taxes or making deep cuts - the focus has instead been on a multitude of smaller areas.
“Ultimately, this was a Spring Statement that could have been a lot worse for the UK economy. Labour has perhaps learned its lesson that the economy requires a more positive tone from government, and that the burden placed upon businesses at the Budget was enough for now. How long this can last remains to be seen. As Reeves was keen to stress, much of it is out of her hands and down to the global economy.”
Government commits to exploring long overdue ISA reform
Rachael Griffin, tax and financial planning expert
“It’s encouraging to see the Treasury taking a serious look at ISA reform. ISAs are long overdue some careful thought to ensure they are both simple and produce the right behaviours. There’s a real opportunity here to simplify the system and better align it with Labour’s objectives. Making stocks and shares ISAs more attractive than their cash counterpart could help more people grow their wealth over the long term and direct more capital toward productive investment, which is clearly a goal for this government. Many Britons hold excessive cash generating low returns, rather than investing in growth assets that could better secure their financial future and help the UK economy.
“But any reforms must be handled with care. Cash ISAs remain popular for a reason — they offer security, accessibility and certainty, particularly for older savers or those with shorter-term goals. The key will be finding the right balance and encouraging investment without alienating those who rely on safer options.
“As a brand ISAs have become increasingly confused with multiple different products and restrictions. Making ISAs easier to understand and use would encourage more people to engage with them, particularly younger savers. Any reform should also maintain strong tax incentives to ensure ISAs remain a compelling option for long-term wealth-building.
“Ultimately, the government has an opportunity to modernise ISAs in a way that boosts investment while keeping them accessible and attractive to savers. Striking the right balance between flexibility, incentives, and simplicity will be key.”
State pension just 15p shy of breaching tax allowances in 2026, forecasts OBR
Jon Greer, head of retirement policy
The OBR’s latest forecasts confirm we are fast approaching a bizarre tax cliff edge for pensioners. With the state pension forecast to rise by 4.6% in April 2026 under the triple lock, it will land just below the frozen personal allowance.
That leaves the UK potentially only one year away from pensioners having to effectively hand a portion of their state pension back to the Exchequer in tax, which to many would seem perverse.
Reeves had committed to keeping allowances frozen until 2028 but, depending on what the actual uprating figure may be, could look to avoid the full state pension exceeding the personal allowance via the Autumn Statement later this year.
What was intended as a mechanism to protect pensioners from poverty is now colliding with fiscal drag. This situation is the result of the triple lock producing some significant increases in the state pension due to high inflation and earning figures while the government has failed to uprate tax thresholds in tandem.
It also adds to the debate of what looks like the inevitable review of triple lock. One potential reform to the triple lock is to link increases to earnings, with a temporary CPI indexation when inflation exceeded wage growth but generally falling in line with long term wage increases, helping align pension growth with the wider economy and creating a more predictable and affordable system.
Any change must be handled carefully. The state pension is the single largest area of welfare spending and a vital source of income for millions. But if Labour is serious about building a fairer and more sustainable system, it cannot ignore the long-term pressures the triple lock presents.
| Full new state pension | |||||
| Triple lock increase | Weekly | Annual | Personal Allowance | Difference (Personal Allowance - Pension) | |
| 2024/25 | 8.50% | £221.20 | £11,541.90 | £12,570 | |
| 2025/26 | 4.10% | £230.30 | £12,016.75 | £12,570 | |
| 2026/27 | 4.60%* | £240.90 | £12,569.85 | £12,570 | £0.15 |
| 2027/28 | 2.50%* | £246.95 | £12,885.50 | £12,570 | -£315.50 |
Note that annual state pension figure is the weekly figure divided by 7 to get the daily figure then multiply by 365.25 (to account for leap years). State pensions rounded up to nearest 5p.
*OBR forecasts