On 11 June 2025, the Spending Review revealed plans to increase day-to-day spending from £517.5 billion in 2025/26 to £583.9 billion in 2028/29 and investment spending from £131.3 billion in 2025/26 to £151.9 billion in 2029/30.
Both the NHS and the Ministry of Defence are set to be the biggest beneficiaries of this investment, which is great news for those working on those sectors.
Refurbishing schools, boosting R&D, and building new housing are also key targets for investment and growth.
Rachel Reeves announced her plan to “invest in Britain’s security, in Britain’s health and to grow Britain’s economy so that working people are better off.”
While there are few people who would bemoan investments in schools or the NHS, people are worried about where the money to fund this is going to come from.
Even for those businesses working in targeted sectors, the Spending Review has caused some apprehension.
We seek to cut through the confusion and try to figure out what it might all mean for the future.
The public view of the Spending Review is mixed, but anxiety undoubtedly shines through.
Most Britons do believe that the priorities of the Spending Review are correct, but 67 per cent believe that the Government will need to increase taxes or borrowing in the future to pay for them.
This was reported by a YouGov poll that determined the general consensus on the Spending Review.
Most Britons believe the economy is not doing very well, and nearly half of them see Rachel Reeves as a bad Chancellor.
The economic fears have been corroborated by research from IPSOS which found that eight in ten Britons expect tax rises to occur this year to pay for the Spending Review.
No one can say for sure, but the answer seems a strong ‘probably.’
Reeves has not ruled out a tax increase, a tacit admission to its certainty perhaps.
Council Tax is all but certain to rise as local authorities have been given the power to increase Council Tax by 5 per cent.
These authorities are unlikely to miss an opportunity for more revenue.
Businesses cannot necessarily breathe any sighs of relief yet.
The increases to employer National Insurance Contributions (NICs) in April, combined with other rising expenses, have led to many feeling under pressure.
Income Tax and employee NICs are supposed to be frozen in accordance with a pledge made by Labour, so either the pledge will be broken, or employers could shoulder greater costs.
All of this is happening alongside the ongoing frustrations from the agriculture sector concerning Inheritance Tax (IHT).
Despite other U-turns from Labour recently, it seems unlikely that IHT for farmers will face another one, as Labour is desperate for money to fund the proposed investments.
Despite what anyone might tell you, nothing is set in stone yet.
However, seeking professional advice on how to manage your savings and investments in a tax-efficient way offers the best chance of future-proofing against any potential tax increases.
Reeves has unleashed a torrent of questions rather than quelling fears of economic uncertainty that she likely wanted to do.
Our team are here to help you prepare for the changes coming, whatever they may be.
Keep your finances ready for any tax increases. Speak to our team today!
