What the Spring Statement 2026 Means for Your Insurance.

Main Points

• The Spring Statement contained no new policy announcements. It was a forecast update only.
• Fuel duty stays cut until 31 August 2026, then rises in stages from September, reaching pre-2022 levels by April 2027.
• Electric vehicles registered from April 2025 now pay Vehicle Excise Duty: £10 in year one, then £200 per year.
• Motor traders face a ZEV mandate requiring 28% of new car sales to be electric in 2025, rising to 80% by 2030, but EV sales only reached around 23% last year.
• Stamp Duty thresholds were set in April 2025 and are unlikely to change until Autumn 2026.
• If you miss an insurance payment, contact us straight away.

What Was the Spring Statement 2026?

Rachel Reeves may have delivered her Spring Statement, but for most people, the changes that really matter were already set in motion by the Autumn Budget 2025. Unlike a full Budget, the Spring Statement is primarily an economic forecast update from the Office for Budget Responsibility (OBR). 

Rachel Reeves used this occasion to outline the government’s fiscal position, but no major new tax or spending policies were announced.

This means that if you are a car owner, motor trader, homeowner, or work in insurance, the changes that affect you most are still the ones rolling out from last year’s Autumn Budget 2025. The next big changes will likely unroll during the new Autumn Budget announcement later in the year.

What Does The Spring Budget Mean for Drivers?

Fuel Duty

The 5p-per-litre fuel duty cut that has been in place since 2022 has been extended until 31 August 2026. After that, duty will increase in stages:

• 1p per litre in September 2026
• 2p per litre in December 2026
• A further 2p per litre in March 2027

By April 2027, fuel duty will return to pre-2022 levels, though it will still be frozen at the 2012 rate of 52.95p per litre. For everyday drivers, this represents a gradual increase in the cost of filling up over the coming year.

Road Tax (VED) Changes

Vehicle Excise Duty rises in line with RPI inflation from 1 April 2026. High-emission vehicles (those producing more than 255g/km CO2) will face the steepest increases.

Electric vehicles registered from 1 April 2025 now pay VED for the first time. In their first year, EV owners pay £10, rising to £195 per year from year two. This is a significant shift for EV drivers who had previously enjoyed road tax exemption.

The Expensive Car Supplement threshold rises to £50,000 for zero-emission vehicles from 1 April 2026, while it stays at £40,000 for petrol and diesel cars.

Fuel Finder Scheme

On a more positive note for drivers, a new Fuel Finder scheme now requires forecourts to report live price changes to a central database within 30 minutes. This is expected to save drivers between 1p and 6p per litre by making it easier to compare pump prices in your area.

What Does The Spring Budget  Mean for Motor Traders?

The ZEV Mandate

The Zero Emission Vehicle (ZEV) mandate requires 28% of new car sales to be fully electric in 2025, with this figure rising to 80% by 2030 and 100% by 2035. 

With EV market share currently sitting around 23%, many car dealers are under real pressure to boost electric sales and face financial penalties if they fall short.

Company Car and Benefit-in-Kind (BiK) Tax

EV company car Benefit-in-Kind rates rise from 3% to 4% from 6 April 2026. Higher-emission vehicles face rates of up to 37%. 

For fleet managers and businesses running company car schemes, this is an important figure to review.

Euro 7 Emissions Standards

From November 2026, all new cars and vans will need to meet the Euro 7 emissions standard. 

Unlike previous standards, this one extends beyond combustion engines to include hybrids, so its reach is broader than many in the industry may expect.

Motability Scheme VAT Change

From 1 July 2026, the VAT zero-rating on Motability Scheme Advance Payments comes to an end. 

New leases will be subject to standard 20% VAT, though Wheelchair Accessible Vehicles remain exempt. If you work closely with Motability customers, it is worth flagging this change with them sooner rather than later.

What Does It Mean for Homeowners?

The Spring Statement brought no new Stamp Duty Land Tax changes. The thresholds introduced in April 2025 remain in place:

• Standard buyers: nil-rate band at £125,000
• First-time buyers: relief applies up to £300,000, with partial relief up to £500,000

Since 2021, the proportion of homes that are stamp duty-free for first-time buyers in England has fallen by nine percentage points to 41%. 

With stamp duty being one of many barriers for first-time buyers in an already turbulent market that’s hard to break into, it’s predicted that this issue could be prioritised at the Autumn Budget 2026.

Mortgage Rates

The OBR forecasts that mortgage interest rates will rise from 4.1% in 2026 to an average of 4.5% each year between 2027 and 2030. 

However, as of mid-February 2026, a number of lenders have already moved below 4%, which is welcome news for the 1.6 million homeowners coming off five-year fixed rate deals this year.

What If You Are Struggling to Pay Your Insurance?

With costs rising across the board, we understand that some people may find it harder to keep up with monthly insurance payments. Whether it’s personal covers such as home insurance, or commercial cover such as a van policy or courier insurance, cancelled insurance policies can stay on record for around five years. As a consequence, this may affect your ability to get cover or result in higher premiums in future. What’s more, if you drive your vehicle and your car insurance lapses, you will be classed as driving without insurance, so it really is important to act quickly.

If you miss a payment, your account will be flagged as being in arrears and you will be notified straight away. 

Above all, the most important thing to do is contact us as soon as possible. Don’t hesitate to get in touch with us on 01782 880140 or contact us online to explore options such as:

• Setting up a new payment plan
• Changing your direct debit date

If you are experiencing wider financial difficulties, the following organisations offer free support and advice:

• Citizens Advice Bureau
• National Debt Line: 0808 808 4000
• Step Change: 0800 138 1111
• MoneyHelper (formerly Advice UK): 0300 500 5000