Spring Budget 2025 summary: What Rachel Reeves announced in today's speech
26 March 2025, 13:53 | Updated: 26 March 2025, 16:02
From welfare cuts to civil servant reductions and an increase in UK's defence spending - here's what the Chancellor's budget outlined today.
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Rachel Reeves took centre stage in parliament today, March 26th 2025, to deliver Labour's Spring Budget outlining the next lot of spending cuts and latest economy figures.
Most of what the Chancellor of Exchequer said in the Houses of Parliament was well known before she delivered her speech outlining cuts in welfare and benefits, a reduction in civil servants and the increase of the UK's defence spending. She said there would be no increase in taxes.
Laying out her plans for the growth of the UK economy, Ms Reeves said: "This labour government was elected to bring change to our country. I am proud of what we have delivered in just nine months.
READ MORE: What are the benefits and Universal Credit changes outlined in the Spring Budget 2025?
"Now our task is to secure Britain's future in a world that is changing before our eyes. The job of a responsible government is to not step back but step up."
Here's a full summary of what the Spring Budget 2025 outlines and what it means for the UK:
What are the Budget welfare and benefits cuts?
Rachel Reeves announced: "We are reforming our welfare system and supporting more people into secure work and pulling them out of poverty."
As part of the announcement, she confirmed the government will be encouraging everyone who can work to do so and added that the OBR statement forecasts this change will save £4.8billion.
One change is for the Universal Credit system where they have announced the allowance will increase from £92 a week to £106 by 2029/30. They will, however, be cutting the Universal Credit health element by 50% and new claims will be frozen.
The welfare reform also includes a stricter eligibility test for personal independence payments (Pips) from November 2026.
What did Rachel Reeves say about civil servants?
The Spring Budget 2025 outlined plans to decrease the costs of running the government by the end of the decade by 15%. The first step of this is to reduce the size of the civil service by opening a voluntary exit scheme. Around 10,000 jobs are expected to go.
Defence Secretary joins Nick Ferrari ahead of the Chancellor's Spring Statement | Watch in full
What did the Spring Budget 2025 say about increasing the UK's aid and defence?
There were no surprises here as she confirmed defence spending will increase to 2.5% which will be partly helped by the reduction of overseas aid.
By 2029/30, the Chancellor confirms this will save £2.6bn in day-to-day spending, allowing for the increase in budget.
Ms Reeves said: "This additional investment is not just about increasing our national security but increasing our economic security, too."
In addition, she confirmed in the speech how some of the funds would be spent, adding: "We will spend a minimum of 10% of the Ministry of Defence’s equipment budget on novel technologies including drones and AI enabled technology, driving forward advanced manufacturing production in places like Glasgow, Derby and Newport.
"This will create demand for highly skilled engineers and scientists and delivering new business opportunities for UK tech firms and start-ups."
What did Rachel Reeves say about tax evasion?
The Labour government plans to crackdown on tax evasion as they set out plans to "increase the number of fraudsters charged each year by 20%".
It's believed this measure will help avoid tax increases and will bring in around £7.5billion in revenue.
What did the Spring Budget 2025 say about UK growth?
Referring to the OBR, Ms Reeves said that UK growth will increase every year. She added: "By the end of the forecast our economy is larger compared to the OBR’s forecast at the time of the budget.
"This is about improving people’s lives. Working people are still feeling the pinch after a cost of living crisis that saw prices spiral. So I am pleased that the OBR confirmed today that Real Household Disposable Income will now grow this year at almost twice the rate expected in the autumn. And living standards will rise twice as fast this parliament compared to the last."
It was forecast that UK homes will be £500 a year better off by the end of the forecast.
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