The spring statement was as quiet for personal finance as many predicted, with no reference made to pensions or retirement by the Chancellor of the Exchequer.
Speaking in the House of Commons on Wednesday afternoon (13 March), Philip Hammond did not utter a single word on pensions throughout his half an hour speech. The statement’s supplementary documents also offered nothing new in the realm of retirement.
However, the Chancellor did offer a cursory nod to social care as he announced a three year spending review to be published alongside the next Budget – on the condition that the UK had managed to strike a deal with the European Union. In the Autumn Budget last year, Hammond pledged £650m to boost social care.
While Westminster is consumed with Brexit drama, Hammond’s speech made consistent references to plans for leaving the EU. He urged members of the House more than once to strike a deal with the EU, at which point he said he could deliver his three-year spending review.
Elsewhere, Office for Budget Responsibility (OBR) figures showed the UK economy is set to grow by 1.4% in 2020 and by 1.6% in the following three years, although this year’s growth forecast was reduced to 1.2%.
Hammond said the OBR predicted borrowing is set to fall to £13.5bn in 2023, from £29.4bn this year, well below the previous forecast of £19.8bn in 2023.
The Chancellor praised the figures, noting “national debt is falling sustainably for the first time in a generation”.
As a percentage of GDP, debt peaked at 83.3% in 2018/19 and is expected to fall to 82.2% in 2019/20, then 79%, 74.9%, 74%, and finally 73% in 2022-23.
However, the OBR report noted that the government’s “stated ‘fiscal objective’ is to balance the budget by 2025-26” but its past forecast performance suggests “it now has a 40%” chance of doing so by the end of our forecast in 2023-24.