Chancellor Rachel Reeves has claimed UK households will be £500 a year better off under Labour, according to her Spring Statement delivered today.
The Chancellor told the House of Commons that compared to forecasts in the final budget delivered by the Conservatives, the Office for Budget Responsibility (OBR) predicts people will be, on average, £500 a year better off under the Labour Government.
She stated this would mean "more money in the pockets of working people, higher living standards, promised by this Labour Government, delivered by this Government". The claim was made as part of her economic update to Parliament this afternoon.
However, financial expert Martin Lewis has questioned the Chancellor's claim about households being £500 better off.
Taking to X, formerly Twitter, Lewis wrote: "'OBR say in real terms people will be £500 better off under this Labour Government'. Chancellor gives very unspecific quote, I'm presuming that's over the life of Parliament, so £100/yr."
The MoneySavingExpert.com founder criticised the "unspecific" figure, saying he wished it had clarified what Reeves meant.
He added that there was "lots of looking up numbers will be needed once full documents published later today".
Lewis wrote: "So where did the Chancellor's #SpringStatement "real household disposable income will rise £500" come from
PAIn her statement, Reeves confirmed that the OBR now expects real household disposable income to grow at almost "twice the rate" they had previously expected in the Autumn Budget.
She claimed that by the end of the decade, people will be £500 per year better off on average compared to previous forecasts.
The Chancellor specified this figure takes inflation into account. This improved outlook forms part of the OBR's updated economic forecasts, which also showed that while growth for 2025 has been halved from two per cent to one per cent, subsequent years are expected to see better growth than previously anticipated.
Lewis wrote: "So where did the Chancellor's #SpringStatement 'real household disposable income will rise £500' come from? Below I've clipped what seems to be the relevant bit from the OBR, and its not that rosy.
"The £500 isn't mentioned but looking at this, it's over the life of parliament, not per year. Most of it comes in the last two years, after drops first, and is based on assumptions that some of the current tax proposals, e.g. freezing tax thresholds will end. It's worth a read..."
According to the OBR report, real household disposable income per person is expected to grow at an average of around 0.5 per cent a year from 2025-26 to 2029-30
ITV/THE MARTIN LEIWIS MONEY SHOW LIVE According to the OBR report, real household disposable income per person is expected to grow at an average of around 0.5 per cent a year from 2025-26 to 2029-30.
However, this growth will "vary significantly" across the period.
The OBR forecasts a sharp slowdown from 2.5 per cent in 2024-25 to almost no growth in 2027-28. This slowdown is attributed to four factors: lower real wage growth, non-labour income returning to medium-term trends, increased household taxes, and slower benefits growth.
After this period, real household disposable income is expected to recover, growing at an average of two-thirds of a per cent annually in 2028-29 and 2029-30.
Despite the positive outlook on household income, Lewis noted that the Spring Statement contained "little new in that area that hasn't been announced already
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This improvement comes as the freeze on income tax thresholds ends and real wage growth increases.
Despite the positive outlook on household income, Lewis noted that the Spring Statement contained "little new in that area that hasn't been announced already".
The Chancellor did announce some changes to benefits, including a reduction of the Universal Credit Health Element by 50 per cent for new claimants.
She also confirmed an expected increase to the National Living Wage.
