What does the Chancellor’s 2026 Spring Statement mean for families?

In her second Spring Statement on 3 March 2026 Chancellor Rachel Reeves stated that the government continues to be focused on securing Britain’s future through its Plan for Change – driving economic growth, building an NHS fit for the future and keeping the country safe. The official forecasts showing that she is still on track to meet her main target for the public finances. Since the Chancellor came into office there has been a reduction in the rate of inflation, and the Office for Budget Responsibility (OBR) predicting a continued fall from 3.4% last year to 2.3% in 2026 and then to the 2% target in 2027.

This is welcome for households and families who are seeing some easing of the cost of living pressures through falls in interest rates and a rise in the National Living and Minimum Wage. However, the Chancellor made her statement at a time of great uncertainty and instability due to the conflict in the middle east and in particular the impact this has already had on oil and gas prices. The UK economy as a whole is not immune to the effects of this, and in particular households in Northern Ireland have already seen a significant increase in the cost of home heating oil over the past few days.

Key points

This Spring Statement did not have any new or changed policy announcements, so we do know that those announcements made in the November 2025 Budget will be going ahead as planned. Read the Spring Statement on the Government’s website here.

However, during her speech, the Chancellor did make several points on how previous decisions are making a positive impact on UK households, these included;

“Real wages have now risen more since the election than they did during the first thirteen years of the previous government.”

“The interest rate cuts we have supported will save families over £1,300 a year on a typical new fixed-rate mortgage.”

“By the next election people will be over £1,000 a year better off after accounting for inflation.”

Previously announced changes being implemented in April 2026:

• Freezing the rates of Income Tax, National Insurance Contributions and VAT
• Universal Credit: the two-child cap will be scrapped
• Universal Credit Childcare Element increased for each additional child
• Universal Credit Standard allowance increasing by 6.1%
• Other Universal Credit elements and other working age benefits increase by 3.8%
• National Living and Minimum Wage increasing by at least 4.1% depending on age,
• State Pension increasing by 4.8%

There will be no change in the rates of income tax and a continued freeze in the tax-free personal allowance and the thresholds at which earners start to pay basic and higher rates of income tax until April 2028. This means that more people will be paying tax, and more will be paying tax at a higher rate.

Note: However, the announcement on income tax changes applies in England, Wales and Northern Ireland only. Scotland has different taxation rules to the rest of the UK. The Scottish government set out its tax and spending plans for 2026-27 in its Budget Statement on 13 January 2026.

Northern Ireland

As a result of the Spring Statement announcements, and adjustments having been made since the 2025 Spending Review, Northern Ireland, through the Barnett Consequential, will receive £390 million for the NI Executive to spend on public services. It is up to the Executive to decide when and how this money will be allocated across the government departments, but we would wish to see a significant portion ring-fenced to support the delivery of short-term financial support for families and the childcare sector, and longer-term investment in childcare infrastructure through the new Early Learning and Childcare Strategy.

We are here to help you

We know it can be difficult to work out what financial support is available for your family and to interpret what changes announced in the Spring Budget mean for you. We want to make sure all families are receiving everything they are entitled to. For free, impartial and confidential advice, contact our Family Benefits Advice Service at fbas@employersforchildcare.org.