Spring Statement 2026: What It Means for Your Salary and Take-Home Pay
Spring Statement 2026: What It Means for Your Salary and Take-Home Pay
The Chancellor delivered the Spring Statement on 26 March 2026. Unlike a full Budget, the Spring Statement doesn't normally introduce new tax changes — but this one included significant OBR forecast revisions and public spending adjustments that affect UK workers. Here's what matters for your pay.
What the Spring Statement Covered
The Spring Statement 2026 focused on:
- Updated OBR economic forecasts (growth, inflation, employment)
- Spending cuts totalling £14bn to meet fiscal rules
- Welfare reform changes affecting Universal Credit
- Confirmation of planned departmental savings
Crucially: no changes to income tax rates, National Insurance, or personal allowances were announced. The 2025/26 rates announced in the October 2024 Budget remain in place until at least April 2026.
Your Take-Home Pay Is Unchanged for 2025/26
If you're asking "did the Spring Statement change my pay?" — the answer is no. The deductions on your payslip for April 2025–April 2026 are:
| Threshold | Amount |
|---|---|
| Personal Allowance | £12,570 |
| Basic rate (20%) | £12,571 – £50,270 |
| Higher rate (40%) | £50,271 – £125,140 |
| Additional rate (45%) | Above £125,140 |
| Employee NI (8%) | £12,570 – £50,270 |
| Employee NI (2%) | Above £50,270 |
Use the salary calculator to get your exact take-home.
What the OBR Forecasts Mean for Wages
The Office for Budget Responsibility revised its wage growth forecasts downward slightly for 2026 and 2027. Key projections:
- Real wage growth expected to slow as public sector pay awards moderate
- Inflation forecast to settle near 2% through 2026, protecting purchasing power
- Employment broadly stable, though public sector headcount falls expected from spending cuts
For most private sector workers, this means wage increases in 2026 are likely to be smaller than 2024–25, but still modestly ahead of inflation.
The Welfare Changes: Who's Affected?
The biggest income impact for lower earners comes from Universal Credit changes:
- The standard UC allowance is being reduced for new claimants from 2026
- The health-related UC top-up (LCWRA element) is frozen for existing claimants and cut for new ones
If you're in work and receive Universal Credit as a top-up, check your entitlement — the changes phase in gradually, but could reduce your total household income.
Public Sector Pay: What to Expect
Public sector workers (NHS, civil service, education, police) are facing tighter pay award guidance following the spending cuts. Early indications:
- Pay review body recommendations for 2026/27 are expected to come in below 2025/26 awards
- Some departments have been told to find savings from existing pay budgets
- The 2025/26 NHS pay award (worth around 3.6% for most bands) remains paid
If you're in the public sector, factor in potentially below-inflation pay rises when planning your 2026/27 finances.
Planning Your Finances for 2026/27
With the tax year ending 5 April 2026, now is a good time to review:
Use Your ISA Allowance
You can contribute up to £20,000 to an ISA in 2025/26. The allowance doesn't carry over — use it before 5 April 2026 or lose it.
Pension Contributions
Tax relief on pension contributions is unchanged. If you're a higher rate taxpayer, contributing before April is worth 40% tax relief. Annual allowance: £60,000 (or 100% of earnings if lower).
Review Your Tax Code for 2026/27
HMRC typically issues new tax codes for the new tax year in March–April. Check your P2 coding notice or HMRC online account — errors are common if your circumstances changed (new job, benefits, side income).
Capital Gains Annual Exemption
The CGT annual exemption is £3,000 for 2025/26 (down from £12,300 in 2022/23 — a major cut over recent years). If you have investments with gains, the window for using the exemption closes 5 April 2026.
Looking Ahead to 2026/27
The 2026/27 tax year (from 6 April 2026) will bring:
- Threshold freeze continuing — no uplift to personal allowance or higher rate threshold
- Employer NI at 15% continues (no reversal planned)
- National Living Wage expected to rise again (exact amount from April 2026 confirmed by government)
- Potential further welfare reform changes
We'll update the salary calculator and this blog as 2026/27 rates are confirmed.
Summary
The Spring Statement 2026 didn't change your payslip for this tax year. The bigger story is slower wage growth ahead, public sector pay pressure, and the continued squeeze from frozen thresholds. Now is a good time to make the most of 2025/26 allowances before the tax year closes on 5 April 2026.
Get your exact 2025/26 take-home: Use the UK Salary Calculator — enter your gross salary, tax code, pension, and student loan for a full breakdown.