Following the rather significant Autumn Budget, the 2025 UK spring budget was billed as something that would balance public finances. It would also “secure Britain’s future in a world changing before our eyes”.

The key question on everyone’s mind, is of course what impact this latest budget will have on everyone’s personal finances. Read on as we decode the budget and how it might affect you. 

Financial planning – the highlights of the 2025 budget

In general, the spring statement maintained a status quo with regard to national insurance, capital gains and inheritance tax (IHT) and VAT. All of which adds up to a slightly better situation for the average taxpayer. 

There was, however, a much bigger emphasis on the enhancement that would be made to the debt management system linked to HMRC. The emphasis in this direction is on the targeting of those who commit tax avoidance, with a greater effort to clamp down on tax evasion. So, the big message here is that is you are committing tax fraud, the government will be cracking down. They are giving rewards for information, tackling those advisors who facilitate non-compliance and leveraging bigger penalties for those who are caught committing tax fraud. 

This means that now is a good opportunity for individuals to take a good look at their financial planning strategies. They need to ensure that they anticipate those changes that might occur in the autumn. A wealth planner or professional advisor can help you understand your best options.

Business Relief

From April 2026, business owners will face an increased IHT liability. This is as a result of the £1 million cap on relief (previously announced). A recent HMRC consultation has however suggested it may  be possible to benefit from this allowance several times. 

Business Relief asset gifts from the period 30 October 2024 to 5 April 2025 will count towards the allowance. Plus, there will be a reset period for Agriculture and Business Relief that will be set every seven years from the date of each gift. Unlike other IHT allowances, this Business Relief investment allowance cannot be shared between spouses. 

Household finances

The overall effect of the budget is that it does seem likely that the Chancellor will meet the current spending rule which is set at £9.9bn. This was the headroom amount they had previously budgeted as well. However, there is a great deal of uncertainty about the future. This means that continuous debate about such things as tax increases and spending cuts rages. When it comes to household finances there is a significant amount of economic uncertainty. This doesn’t just stem from our own budget but also as a result of the actions of the US government and their uncertain range of tariffs. 

With all of this uncertainty around the 2025 budget it is a good time to be cautious. If you have investments, then it can be a good idea to move them to more stable accounts. A good financial advisor will be able to advise you on this and any other aspect of financial planning. Remember that the value of your investments, and any income from them can go up or down. You are not guaranteed to get back what you put into them so keeping a close eye on them, and having professional advice is always a good idea. 

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