Our regular blog readers will know that we always write a post after the big government financial events, which tend to happen twice a year. The main Budget is in the autumn and at this time of year, it’s the Spring Statement. This statement doesn’t often bring with it any major changes to payroll-related measures and this time is no exception. Any changes, such as the increase in employers’ national insurance, were announced last autumn and you can find the blog about that here.
National Living and National Minimum Wage
The Chancellor confirmed in the Statement that the National Living Wage and National Minimum Wage will be increasing from next week. The National Living Wage (NLW) will rise by 6.7% to £12.21 per hour and the National Minimum Wage will increase to £10 per hour. This increase translates to an approximate annual pay rise of £1,400 for full time workers on NLW.
Welfare and Benefits
With the economy still not performing as well as hoped and with the growth forecast for this year lowered again, the Chancellor announced further cuts to some welfare benefits such as a freeze in health-related universal credit for new claimants and a slightly reduced reduction in the universal credit allowance.
The changes to the eligibility criteria for personal independence payments were announced last week and as Pip can be claimed by working people, this may have an impact on employees, increasing financial stress and potentially impacting productivity. Some employers might consider enhancing employee assistance programs to support their employees – our blog last month covered EAPs.
Payroll changes The start of the new financial year next week will have implications on employers’ payrolls in two ways – the new wage rates and the increase in the portion of national insurance that employers have to pay. These will add costs to businesses and so we have been working with our clients to ensure they have a clear picture of that, so they go into the 2025/26 tax year equipped with the information they need.