The Chancellor of the Exchequer will deliver the Spring Statement on 23 March 2022.

The Spring Statement is normally a relatively low-key summary of the state of the UK economy; but owing to various adverse economic circumstances the 2022 Spring Statement may be more like a mini-budget containing important tax measures. In addition to the financial consequences of the pandemic, the UK is facing high inflation rates and in particular a sharp rise in fuel bills. Various pressure groups, and the Opposition in parliament, are calling for measures to provide relief to households.

National insurance contributions

A rise of 1.25% in national insurance contributions was due to take effect in April 2022, adding to the pressure on household income at a time when inflation is high and energy bills are due to increase sharply. The Chancellor is being urged to delay this increase.

Personal allowances and thresholds

A number of personal tax allowances and thresholds have previously been frozen, instead of rising at or around the rate of inflation. Among these were the income tax personal allowance and the higher-rate threshold, which were frozen for the years from 2022/23 to 2025/26. There are now calls for the Chancellor to reverse these freezes and increase the thresholds in line with inflation, to ease the pressure on household incomes.

Pensions lifetime allowance

The pensions lifetime allowance was frozen at its current level of GBP 1,073,100 until April 2026. Freezing the threshold restricts the amount that people can save in pension funds without being liable to an additional tax charge. There have been calls for this allowance to be increased in line with inflation.

State pensions

The government took the decision to temporarily remove the earnings component of the state pension triple lock, so earnings are not used as a reference in calculating pension increases. The inflation component does not take account of the amount by which prices have risen between September 2021 and April 2022. As a result, in April 2022 the pensions are due to increase by 3.1% which is well below the current rate of inflation in the UK.

Universal credit

Universal credit is set to rise at 3.1%, far below the projected rate of inflation. The Chancellor is being urged to give more help to low-income households, which could be a general increase in universal credit to counter the effects of inflation or a more specific measure to help households to pay energy bills.

Fuel duty

There is some speculation that the Chancellor could reduce the rate of fuel duty, as he has recently acknowledged that paying for petrol is a significant expense for households.

Other

The Labour party has called for a windfall tax on the profits of energy companies, but the government is currently not expected to announce this measure.

Some commentators have suggested that help with the higher energy bills could be given by way of value added tax (VAT) relief, but there is currently no sign that the Chancellor will take this course.