While discussions of departmental budgets and fiscal policies might seem removed from daily expenses, the Spending Review, though not a budget involving tax changes or new policy announcements, will significantly impact personal finances.
Here’s how:
Public sector employment and compensation will be directly affected. Increased government funding is allocated to defense and the NHS, along with science and technology, while other areas face reductions.
Over three years, funding will decrease annually by 1.7% for the Home Office, 6.9% for the Foreign Office (primarily aid), 5% for the Department for Transport, 2.7% for Environment and Rural Affairs, and 1.8% for Business and Trade. These cuts may lead to job losses and wage reductions.
Conversely, long-term projects creating jobs are planned. For example, the Sizewell C nuclear plant is projected to generate 10,000 direct jobs and thousands more indirectly.
From September 2026, all English children in families receiving Universal Credit will qualify for free school meals. Currently, eligibility requires an annual household income below £7,400. This contrasts with existing policies in other UK nations offering broader free school meal access.
Funding for community renewal projects in 350 areas is promised, focusing on parks, youth centers, and libraries. However, increased council taxes are anticipated to bolster local authority spending power.
Local government funding increases slightly, affecting services including social care, local amenities, and even waste collection. Devolution creates complex funding structures across the UK nations, demanding careful analysis.
Funding allocations for 2026-2029 are: £52bn for Scotland, £23bn for Wales, and £20bn for Northern Ireland.
The £2 bus fare cap in England (excluding London and Manchester) is extended to at least March 2027, from its previous end date of 2025.
Investments are planned for Northern Powerhouse Rail, Greater Manchester, West Yorkshire, and Midlands tram networks, a Newcastle to Sunderland metro extension, and southwest England train services.
Winter fuel payments will expand this year, benefiting all pensioners in England and Wales with taxable incomes up to £35,000, a significant change from previous restrictions. Scotland and Northern Ireland policies may be reviewed accordingly.
The £1.25bn cost to restore this payment (ranging from £200 to £300 per household) will be detailed in the autumn Budget.
The Sizewell C nuclear plant, receiving £17.8bn in taxpayer funding, will increase household energy bills by approximately £1 per month due to borrowing interest, although long-term savings are anticipated.
Further investment in home insulation is planned to curb energy consumption and bills. A £39bn commitment over 10 years aims to build 1.5 million affordable and social homes in England by 2030, but funding sources and potential tax implications remain unclear.
Additional funding of £10bn is allocated to Homes England to stimulate housebuilding.
The Spending Review prioritizes increased funding for defense, computing, and carbon capture technology. Chancellor Rachel Reeves detailed the government’s spending plans. A £50m contribution is pledged for Casement Park redevelopment. While some prices increased, others such as petrol, airfares, and clothing, decreased.