2026 Spring Statement: Upcoming tax reforms remain

Just over three months after her lengthy Autumn Budget, chancellor Rachel Reeves has delivered the government’s 2026 Spring Statement.

It will come as a relief to many, including business owners, that the Spring Statement included no additional tax-raising measures, no changes to pensions, and no changes to ISAs.

However, previous announcements, including changes to the tax regime, remain in place, and will affect personal finances and business owners in 2026/27 and beyond.

Reeves also gave an overview of the Office for Budget Responsibility’s (OBR) economic forecast for the years to come. Notably, the OBR’s forecasts and the Statement made no mention of the potential economic impact of the unfolding situation in the Middle East, which may contribute to increased oil and gas prices that could prove inflationary and cause stock market volatility.

New tax measures will remain in place

The chancellor confirmed that key tax measures, announced in the Autumn Budgets of 2024 and 2025, will remain in place.

Here are the key changes that have been reconfirmed:

• Inheritance Tax (IHT) will be levied on most unused pension benefits from April 2027. It’s estimated that this change will result in an additional 10,500 estates being liable for IHT in 2027/28. This will contribute to a predicted rise in IHT receipts to £15 billion by 2030.
• Tax on income earned from property will rise by two-percentage points from April 2027, increasing tax liability for landlords.
• There will also be increases in the basic and higher rates of Dividend Tax from April 2026, which may affect business owners and investors. The basic rate will rise to 10.75% (from 8.75%) and higher rate to 35.75% (from 33.75%).
• Key tax thresholds, including those for Income Tax and the IHT nil-rate bands, will remain frozen until April 2031.

Many will be relieved that no new tax measures were mentioned, so the Spring Statement will be welcome news for many. But the Autumn Budget changes mean a review is still worthwhile.

OBR has updated its forecasts for GDP growth, inflation, and house prices

The OBR has updated its real-terms GDP forecast every year between 2026 and 2029 when compared to the estimates it made in the 2025 Autumn Budget. They now expect the economy to grow by:

• 2026 – 1.1% (a decrease of 0.3%)
• 2027 – 1.6% (unchanged)
• 2028 – 1.6% (an increase of 0.1%)
• 2029 – 1.5% (unchanged)

The OBR expects inflation to be at or around the Bank of England’s (BoE) 2% target over the next five years. Real household disposable income is expected to grow by between 0.6% and 0.9% each year until 2030.

The Bank of England has already cut its base interest rate several times since the current government formed in July 2024, as inflationary pressures eased.

If the OBR’s forecast is accurate, the BoE is likely to make additional cuts, which would reduce the cost of borrowing for households and businesses.

The OBR expects unemployment to rise from 4.75% in 2025 to a peak of 5.33% in 2026, driven by weaker demand for labour. After peaking in 2026, unemployment is expected to fall to 4.1% in 2030.

It also forecasts that house prices will rise by between 2.4% and 2.9% each year between 2026 and 2030.

Important note

The content of this Spring Statement summary is intended for general information purposes only. Please seek professional advice before making plans or entering new agreements.

‍

‍

‍