Inflation has peaked and is set to fall to 2.9% by the end of 2023, said Chancellor Jeremy Hunt in his Spring Budget, as he unveiled plans for help with fuel bills, childcare costs and pensions.

“The UK will not enter a technical recession this year,” said Chancellor Jeremy Hunt in his Spring Budget statement.

The UK economy is set to contract by 0.2% in 2023, before heading into a growth rate of 1.8% in 2024.

The unemployment rate is also expected to be less severe this year, with unemployment rising by less than 1% to 4.4%.

And in welcome news, inflation has peaked, with the Office for Budget Responsibility reporting that it will fall back to 2.9% by the end of 2023.

So how does the Spring Budget affect household budgets?

Free childcare for all under 5s

Acknowledging that the UK has one of the most expensive childcare systems in the world, Hunt pledged free childcare for all under 5s.

‘Nearly half of non-working mothers say they’d prefer to work if there was suitable childcare’, said Hunt.

‘But for many a career break becomes a career end.’

In eligible households where all adults are working at least 16 hours a week, 30 hours of free childcare will be provided for children aged 9 months or over, starting when maternity or paternity leave ends.

The plan is set to be introduced in stages:

  • From April 2024, working parents of 2-year-olds will receive 15 hours of free childcare

  • From September 2024, this will be expanded to all children aged 9 months or over

  • From September 2025, every parent will have access to 30 hours of free childcare a week

How will it happen?

  • Childminders are to be offered incentive payments of £600 for signing up to the profession, rising to £1,200 for those who sign up through an agency

  • Nurseries will also be given more flexibility in how they operate, with minimum child to staff ratios raised from 1 to 4 to 1 to 5 – as is currently the case in Scotland

  • Parents on Universal Credit who want to move into work or increase their hours will have their childcare costs paid upfront by the government, with £951 allocated for one child and £1,630 allocated for two

By September 2026, the government plans for all schools to offer wraparound care from 8am to 6pm.

Energy price guarantee to remain for a further 3 months

The energy price guarantee will remain at £2.5K for the next 3 months, ahead of an expected fall in energy prices in July, saving the average family £160.

And for the 4m households on pre-payment meters, charges will be brought inline with comparable direct debit charges.

“The energy premium paid by our poorest households is coming to an end.,” said Hunt.

Hunt also said the UK needs to focus on ‘domestic sources of energy that fall outside Putin or any autocrat’s control.’

He added: ‘Electricity generated by renewables has increased from 10% to 40% but we need another critical source of cheap and reliable energy – and that is nuclear.

‘It’s vital to meet our Net Zero obligations.’

So nuclear energy will now be classed as environmentally sustainable, giving it access to the same investment incentives as renewable energy.

Fuel duty frozen

The planned 11p rise in fuel duty will be postponed as ‘now is not the right time to up-rate fuel duty inline with inflation’.

So for a further 12 months the government will maintain the 5p cut and freeze fuel duty.


There are currently 1m vacancies in the economy and 7m adults of working age who are not in work.

Hunt said the government wants to remove the barriers that stop people who want to from working.

In a reform of disability benefits, Hunt said the government plans to abolish the work capability assessment, so that claimants can keep their benefits and still work.

He also announced plans for those aged over 50, ‘experienced workers’, to encourage the 3.5m people who are of pre retirement age but who are not currently part of the labour force back to work.


The pensions annual tax-free allowance is set to be increased by 50% from £40K to £60K, while the lifetime allowance will be abolished.

The government believes this reform will stop over 80% of NHS doctors from receiving a tax charge.

Is a regeneration project planned near you?

Hailing Canary Wharf and Liverpool Docks as ‘2 outstanding regeneration projects that transformed the lives of thousands of people’, Hunt announced a further 12 new investment zones for:

  • West Midlands

  • Greater Manchester

  • Liverpool City

  • North East

  • South Yorkshire

  • Tees Valley

  • West Yorkshire,

With 4 planned for

  • Scotland

  • Wales

  • Northern Ireland


A further 8.8bn us set to be invested in sustainable transport, while the government increased the ‘pothole pot’ by £200m to £700m, with £320m allocated to Scotland, £180m for Wales and £130m for Northern Ireland.

And finally, ‘the Brexit pubs guarantee’

For ‘the great British pub’ Hunt increased draught relief, meaning the duty on alcohol will be up to 11 pence lower than that sold in supermarkets.

‘British ale is warm but the duty on a pint is frozen,’ he said.


Key takeaways

  • 30 hours of free childcare a week from September 2025
  • Energy Price Guarantee extended for 3 months
  • Fuel duty frozen for 12 months
  • Pensions: annual tax-free allowance increased by 50% from £40K to £60K and the lifetime allowance to be abolished