It seems quite strange to think that when this year got underway, we were still working under Covid-19 restrictions and a lockdown was in place. That all seems so long ago as it’s been yet another tumultuous year and this time, that wasn’t just caused by the pandemic. As we’re close to the end of 2022, here’s our usual look back at the twelve months just gone.
National Insurance
We mentioned in our blog post at the beginning of the year that National Insurance rates were due to increase by 1.25% in April 2022. That rise did take place and for a while, we all paid a little more into the pot. However, as the cost of living crisis deepened and just before that increase kicked in, the then Chancellor Rishi Sunak announced in the Spring Statement in March that the threshold after which workers would pay National Insurance would increase in July to match the income tax threshold. That meant that although the rate increase would stay, the lowest earners would not have to pay NI at all and others would pay less.
In a further move, another Chancellor Kwasi Kwarteng announced in September that the rise would be scrapped from November although the increase in the threshold would stay. The current Chancellor did not reverse that step in his own Autumn statement last month.
So, it’s been a confusing year for National Insurance but we end it paying less overall than we were at the beginning. We will see in 2023 whether there are further developments.
You can read more about the early changes to National Insurance in our May blog here and the September mini-budget here.
Cost of Living Crisis
We’ve all noticed the increase in the price of everything this year whether it’s our energy bills or a tin of beans at the supermarket. That has driven inflation which has, in turn, driven employees’ requests for a pay rise. Interest rates have also increased in response to higher inflation which has impacted the cost of mortgages.
Overall, it’s been a difficult year financially for many families and employers and we can only hope for some green shoots of recovery next year. If you’d like any help with calculating what a pay rise for your employees would mean for your business, just get in touch.
And if you want to see if you or your employees are eligible for any of the government’s cost of living support schemes, all the details can be found here.
Staff shortages
Many of our clients, especially those in the hospitality sector, have continued to report staff recruitment issues this year with some coping with another busy summer on sparse teams. Others have had to adapt their offering or even close on some days to give their staff a break.
However, data released by the Office of National Statistics this week suggests that unemployment is rising very slightly, the number of vacancies dropping and that more over-50s are choosing to return to the workforce. That does suggest that 2023 might see fewer staff shortages although of course, the reality is never that simple.
2022 for Pixie Payroll
There’s no doubt that this year has been another incredibly busy year for Pixie Payroll as we’ve helped our clients navigate challenges both old and new. Starting the year still in the grip of Covid-19 and managing the impact of sickness and absence as employees continued to contract the virus has been a characteristic of the entire year and we are expecting that to continue into 2023.
We have also been supporting our clients as they help their staff tackle the cost of living crisis which has sometimes involved calculating pay rises and enhanced benefits quite rapidly for their teams.
And of course, we have all had to deal with the death of Her Majesty The Queen in September and the resulting days of mourning, coming so soon after the extra bank holidays for the Platinum Jubilee. We can now look forward to another extra bank holiday in 2023 as the nation marks King Charles III’s coronation in May.
We’d like to wish everyone a happy and peaceful Christmas and best wishes for the New Year.