Following the autumn Budget in October, chancellor Rachel Reeves will be delivering a fresh spring statement on Wednesday 26 March.
While it is not known exactly what will be covered in the spring Budget, Reeves is expected to announce an income tax freeze, an update on the controversial employer national insurance contribution changes, and details on international aid and defence spending, among other items.
For families, in particular, there have already been a number of updates confirmed ahead of Wednesday – not least the changes to the welfare system, national living and minimum wages, and childcare funding.
It comes after bleak new data by the Joseph Rowntree Foundation (JRF) revealed last week that living standards for families in the UK are set to fall further by 2030, with those on the lowest incomes declining twice as fast as middle and high earners.
But for those worried about the upcoming Budget, it might not be all doom and gloom – in fact, there are a few benefits for parents and families that have already been confirmed ahead of time.
Here is a guide to all the major changes, as well as some practical, expert tips to help you save money and plan for the future.
How the 2025 spring Budget could impact families
National living and minimum wages
Announced in the autumn Budget last year, the national living (NLW) and minimum wage (NMW) will go up from April 1, 2025.
For those aged 21 and over, the NLW rate will increase from £11.44 per hour to £12.21 per hour (a 6.7% rise), while those aged 18-20 will benefit from a £10 per hour raise (an 18% increase).
Childcare hours
From September 2025, eligible parents will be able to claim 20 hours of free childcare for all under-fives. To qualify, parents must earn more than £9,518, but less than £100,000 per year.
Private schools
The chancellor previously announced that tax breaks for private schools would end in 2025, to enable the government to better fund state education systems.
This means that a 20% VAT was added to education and boarding fees charged by private schools in January, and also means that from April, the government will be removing charitable business rate relief.
Welfare system
Liz Kendall, the secretary for work and pensions, announced last week that Labour would deliver the “biggest shake up to the welfare system in a generation.”
Not only will the government be reintroducing reassessments for people on incapacity benefits who have the capacity to work, they will be changing the eligibility criteria for Personal Independence Payments (PIP) so that those with “higher needs” are prioritised. They will also rebalance payment levels in Universal Credit to improve the Standard Allowance, raising it by £775 annually.
Four personal finance tips for families
Speaking to Yahoo UK, money coach Talia Loderick shares her top tips for families ahead of the spring statement.
1. Check if you’re eligible for free childcare
How it works depends on where you live in the UK. Visit the government website here to check.
2. See if you qualify for National Insurance credits
“Child Benefit can be paid to either parent,” Loderick explains, “but if you’re in a couple and one of you is stopping work for a time, they should claim so they qualify for the National Insurance credits, as this builds state pension entitlement.
“Higher earners will have to pay at least some of their Child Benefit. Visit the Child Benefit tax calculator on gov.uk for an estimate.”
3. Look into life insurance and draw up a will
“Consider life insurance, which would pay out to your family should you die, and income protection policies designed to cover you if you fall ill and are unable to work,” she says.
“If you’re a parent, draw up a will. If you’re in a relationship but not married or in a civil partnership, without a will, your partner isn’t provided for – even if you have children and are living together,” Loderick adds. “If you have children, a will covers guardianship. This is important, because if both parents die without officially appointing a guardian, courts will decide who is best to look after their children.”
4. Teach positive money management to kids
“Finally, research from the UK has found that adult money habits are formed by the age of seven. Consequently, as a parent, how you manage money influences how your children will manage money as adults,” she adds.
“Model the behaviour and positive money habits you want your children to pick up, from budgeting to saving to spending on the things that matter to you.”
