Spring Budget 2025: What to Know

On 26 March 2025, Rachel Reeves delivered her speech to the House of Commons. She committed to one major economic event - the Budget - each year, to "give families and businesses stability and certainty on tax and spending changes". Today’s Spring Budget announced some changes that many people across the nation will start to feel. Let’s take a look at what they could mean for you.  

Economy and inflation 

Reeves explained the government "must work closely with the Bank of England" to ensure inflation returns to the target of 2% per year. During the Budget, she made mention of the three interest rate cuts since Labour came to office. 

Increased defence spending 

Made official, the government has committed to increasing the NATO-qualifying defence spending to 2.5% of gross domestic product (GDP) by 2027. A further £2.2 billion will be allocated to the Ministry of Defence next year. 

Public services and welfare reform 

In the Budget, there are plans to reform the public services in order to make them more productive and agile – in addition to targeting welfare spending towards those who need it the most.  

On living standards, real household disposable income per person is expected to grow by an average of around 0.5% points each year from 2025/2026 to 2029/2030. This is predicted to be led by stronger wage growth and inflation starting to fall later in the forecast period. 

Expanded housing infrastructure 

One of the key barriers is rooted in the very start of the process: property development. Developers have faced a number of challenges, including labour shortages, land quantity, and inconsistent planning rules. Putting schemes in place to strengthen the workforce and support the delivery of new homes to meet targets was needed.  

The Chancellor confirmed a new £2 billion package of new grant funding to deliver up to 18,000 new social and affordable homes, helping the government to meet its 1.5 million housebuilding target.   

Reeves said that people with the “right skills” are needed to help, stating, "Earlier this week, the education secretary announced more than £600m to train up to 60,000 more construction workers including ten new technical excellence colleges across every region of the country giving working people the chance to fulfil their potential." 

More about mortgages and housing 

Not that we expected a big shake up, but the Spring Budget was light on new measures for the housing and mortgage markets. That means there’s no extension for the stamp duty deadline or reprieve for buyers trying to beat it. There was no new announcement of a mortgage scheme – for first-time buyers or otherwise.  

However, there is more investment in the making – with a construction skills package to train up to 60,000 workers, and a £2 billion package for social and affordable housing.  

Find out more 

Of course, the Spring Budget of 2025 also released more changes that may impact your finances. Check out the full summary here.