Last week, Chancellor Jeremy Hunt announced the ‘Autumn Statement for growth’ which includes new measures that will be introduced in the new year. Some of the proposed changes will affect employment law and the workplace, as the Chancellor hopes it will increase the number of people in work in the UK.
How does the autumn statement affect my organisation?
The changes announced included the following:
- From 6 January 2024, the National Insurance rate for employees will be cut from 12% to 10%. It is predicted that this will help about 27 million people in the UK. The Chancellor announced that this reform alone will lead to a further 94,000 people in full-time employment.
- From April 2024, the National Living Wage will be increased to £11.44 per hour. It was also announced that the National Living Wage will be extended to apply to 21- and 22-year-olds for the first time, who are at the moment only guaranteed the lower National Minimum Wage.
- From April 2024, self-employed workers will see the abolishment of Class 2 National Insurance charges, and Class 4 charges will be cut by 1%. These changes will likely save an average £350 a year for those who are self-employed.
- A new right will enable employees to request new employers to pay into an existing pension pot, changing the current practice of having to sign up to a different pension scheme that is run by their new employer.
What should employers do?
If you are unsure how these amendments will affect you as an employer, make sure to seek professional legal advice to avoid being caught out. Employers should take note of these changes and keep an eye out for further guidance that is awaited regarding workplace pension schemes. In particular, employers should review the impact of the National Living Wage changes on their business. This change could result in significant cost increases for lots of employers (particularly those who employ a considerable number of low-paid staff.