Chancellor Rachel Reeves is set to unveil the Labour Government's spending plans over the next Parliament in the next couple of years, which could have consequences for household finances.
This comes amid reports that the UK could be forced to raise defence spending to 3.5 per cent of gross domestic product (GDP) by NATO; a cost which will need to be paid for by the British taxpayer.
Furthermore, Labour committed to awarding public sector workers in England, including doctors and teachers, a 4.5 per cent pay increase.
In regards to the welfare system, Prime Minister Keir Starmer is under pressure to U-turn on the Chancellor's decision to means-test Winter Fuel Payments and scrap the two-child benefit cap on Universal Credit.
The Chancellor will confirm the Government's spending plans in next week's review
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Analysts are warning cuts to other departments could be on the horizon or further tax hikes, which are likely to be confirmed in this year's Autumn Budget.
Last week, the International Monetary Fund (IMF) urged the Chancellor to relax her strict fiscal rules to give more headroom for economic growth.
Susannah Streeter, head of money and markets, Hargreaves Lansdown: "As the Spending Review approaches, the Chancellor’s fiscal juggling act has become even more tricky.
"There are multiple balls of pledges to be kept up in the air – from defence, to pay demands and relief for families and pensioners."
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Sarra Morris had claimed benefits when telling the DWP she struggled with basic daily tasks and used a walking stick when feeling tired and unsteady.PAHow could pensions be impacted by the Spending Review?
Helen Morrissey, the head of retirement analysis at Hargreaves Lansdown, said: "The Government’s announcement that it would revisit its decision to restrict Winter Fuel Allowance has been greeted with a sigh of relief from pensioners.
"However, for now detail is scant as to what any tweaks could look like. Speculation over tax changes could raise worries for people’s pensions. There are questions around the future of salary sacrifice schemes for workplace pensions.
"This would cut the tax-efficiency of these schemes, which runs the risk of persuading employers to make their pension offering less generous.
"There has also been discussion about the reinstatement of a pension lifetime allowance, which risks undermining people’s confidence and encourage them to pause contributions."
How could taxes be impacted by the Spending Review?
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: "If a potential funding gap emerges, there’s going to be speculation that taxes could be hiked to close it.
"The Government very broadly has two options when it comes to fund raising from taxes. It could make a whole host of smaller tax tweaks – all of which could cause their own problems, or it could tackle a major tax, which would be politically risky.
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Britons are concerned about the rising tax burdenGETTY "As well as the threat of thorny pension tax changes, there are questions around dividend tax. Investors have already seen horrible cuts in the dividend allowance and higher rates introduced, so it would be adding insult to injury.
"Given how attractive the UK market is for investors seeking dividends, it would be counter-intuitive to make dividend investing less rewarding given that the government is keen to encourage investment in the UK.
"Inheritance tax could also be in the frame again. The Government could, for example, tweak the rule which means that gifts of any size can be given to anyone, and as long as you live for another seven years, it’s out of your estate for inheritance tax purposes.
"However, it will have seen the potential backlash from touching the UK’s most hated tax and understand the risks of doing it again. One easier option might be to freeze income tax thresholds until 2030, on the grounds it’s not a tax rise."
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