If you were hoping the Spring Statement 2025 might bring a bit of breathing room for your savings or investments, you’re not alone. And while there was plenty of talk from Chancellor Rachel Reeves about fiscal responsibility and economic recovery, concrete wins for savers and investors were a bit… thin on the ground.

Still, there’s a lot tucked into this year’s statement that’s worth unpacking – especially if you’re trying to figure out what it means for your financial plans over the next few years.

So, let’s walk through it.

The Good News? Inflation’s Settling Down.

Let’s start with something vaguely comforting: inflation is expected to keep falling. The Office for Budget Responsibility (OBR) predicts CPI inflation will average 3.2% this year, dropping to 2.1% in 2026, and hitting the Government’s 2% target from 2027.

That matters if you’ve been watching the value of your cash savings erode in real time. Lower inflation means your money should hold its value a bit better, and you’re less likely to see interest rates climbing (or falling) unpredictably. It also makes fixed-income investments like bonds a bit more attractive again – assuming rates don’t tumble too quickly.

But, while that’s positive, it’s hardly a reason to crack open the Champagne. Inflation falling doesn’t mean life’s getting cheaper – it just means prices aren’t going up as fast. So, any gains in disposable income are likely to feel slow.

What’s (Still) Happening with Taxes?

If you were hoping for tax cuts, you’ll be disappointed. Technically, there were no new taxes announced – but there’s a catch. Tax thresholds are still frozen, and that means something called “fiscal drag” is quietly doing the heavy lifting.

What is Fiscal Drag?

As your income rises with inflation or pay increases, more of it ends up in higher tax bands. So you pay more tax, even if you don’t feel richer. The result? A growing tax burden for millions, without any headline-grabbing rises.

For savers and investors, this matters. More of your interest, dividends, and gains could be taxed – and the longer these thresholds remain static (currently frozen until 2028 for income tax and 2030 for inheritance tax), the more this effect compounds.

Cash ISAs: Safe… For Now

Now to one of the hot topics floating around pre-statement: Cash ISAs. There had been speculation that the Government might slash the £20,000 annual allowance – maybe even down to £4,000 – to encourage more stock market investment.

In the end, though, nothing changed.

That means you can still save up to £20,000 a year tax-free in cash or stocks & shares ISAs – a relief for cautious savers. But given the tone coming from the Treasury recently, don’t be surprised if this gets reviewed again down the line. There’s a clear push for savers to be “more productive” with their money (i.e., take more risk and invest rather than hold cash).

If you’re sitting on large cash ISA balances and wondering whether it’s time to do more with them, this might be the nudge you needed.

No Big Wins for Investors – But No Shocks Either

There were no headline-grabbing investment changes, which in itself is a kind of good news. Capital Gains Tax (CGT) rates and allowances remain unchanged (for now), and the feared wealth tax rumours haven’t materialised.

But, as with income tax, some previous announcements are already doing the heavy lifting in the background:

1. Business Asset Disposal Relief is going up to 14% in April.
2. The non-dom tax regime is being scrapped from April 2025.
3. Stamp Duty cuts will end on 31 March 2025.

So if you’re thinking about business sales, property transactions or restructuring family wealth, timing matters.

Also worth noting: the Government is pushing ahead with its £1 billion crackdown on tax avoidance. For most people, this won’t mean much. But if you’re involved in complex tax planning, expect more scrutiny.

Planning Ahead: What are Your Priorities?

All of this adds up to a bit of a balancing act for savers and investors. No huge changes, but a lot bubbling under the surface that could affect your plans over the next few years.

Here are the four priorities you should be thinking about:

1. Review your ISA strategy. Cash ISAs are still untouched, but consider whether holding large cash balances is right for your goals, especially with inflation slowly easing.
2. Don’t ignore “fiscal drag.” With tax thresholds frozen, you might end up paying more tax without realising it. Think about using allowances like ISAs and pensions more strategically.
3. Plan business or asset sales carefully. With changes to reliefs and upcoming tax shifts, getting advice early could save you a lot down the line.
4. Check your pension position. The triple lock is staying (for now), and pension credit is increasing – good news for retirees. But for those still saving, now’s a great time to check contributions and ensure you’re getting the tax advantages you can.

Next steps?

The Spring Statement 2025 won’t go down as a blockbuster for savers or investors. It was more about keeping things steady than making bold moves. But sometimes, no surprises is a good thing – especially after the rollercoaster of the last few years.

That said, we’re not out of the woods.

With thresholds frozen, inflation still above target, and talk of future ISA reforms simmering in the background, now’s a good time to check in on your financial plans.

At Questa, we’re always here to help you make sense of what these kinds of announcements mean for you. Whether it’s reviewing your ISA strategy, planning for retirement, or just making your money work harder – it helps to have someone in your corner.

Click here to get in touch.