Spring Statement: Key Takeaways

Chancellor Rachel Reeves delivered the Spring Statement 2025 without major surprises, driving home the government’s focus on economic stability amid ongoing challenges. Here are the main points:

Employer’s National Insurance changes stay in place

The previously announced increase to Employers’ National Insurance Contributions (NICs), introduced in the Autumn Budget, remain unchanged. 

Welfare Budget Reductions

The government announced substantial welfare cuts, which the Chancellor says will save the Treasury £4.8 billion. However, the basic level of Universal Credit will see a small increase, alongside extra funding for employment services.

Economic Growth Forecast Adjustments

The Office for Budget Responsibility (OBR) has revised the UK’s economic growth forecast down from 2% to 1% for the year, citing higher borrowing costs and global instability.

Defence Spending Increase

An extra £2.2 billion will go toward defence, bringing spending closer to the target of 2.5% of GDP. Funds will be used for military tech upgrades and refurbishing housing for service personnel.

Housing Development Initiatives

The government has pledged to build 1.3 million new homes over the next five years, with £2 billion allocated for social and affordable housing. This includes 18,000 new homes for lower-income families.

Public Sector Job Reductions

Plans to cut administrative roles within the civil service are set to go ahead, potentially affecting up to 10,000 jobs. The aim is to streamline costs and improve efficiency.

Crackdown on Tax Evasion

A new investment in technology and enforcement aims to recover an extra £1 billion per year by tackling tax evasion. Prosecutions for tax fraud are expected to rise by 20%.

What This Means for Liquid Friday Clients

For hirers, recruiters and contractors, the key takeaway is that previously announced tax changes, including National Insurance reductions, remain in place. However, broader economic pressures and workforce reductions in the public sector could have knock-on effects for recruitment.

We’ve put together a full report detailing all the measures from the Spring Statement, as well as the previously announced tax changes. Download it below, along with revised tax tables for 2025/26, to ensure you stay informed and prepared.