The UK government has recently unveiled a series of budget changes that will take effect in the coming years, impacting everyone from jobseekers and carers to small businesses. Here, we’ll break down the major updates and what they mean for you.
1. Pension and Carer Allowances
One of the most notable changes is the 4.1% increase in basic and new state pension payments starting next year. This rise is part of the "triple lock" policy, ensuring pension growth stays ahead of inflation and earnings. This change aims to offer greater financial security to retirees, particularly crucial in the current economic climate where cost-of-living concerns persist.
Additionally, carer allowances have seen a significant boost. The earnings threshold for full-time carers has increased from £151 to £195 per week. This expansion of eligibility is a welcome change for carers who balance work demands with providing essential care to loved ones.
2. Minimum Wage Increases
The government has also announced plans to raise the legal minimum wage for workers aged 21 and over from £11.44 to £12.21 per hour by April 2025. The rate for younger workers aged 18 to 20 will increase from £8.60 to £10.00 per hour. These changes aim to support low-income workers and reflect the government’s response to calls for fairer wages amid rising living costs.
3. Employment Allowance Rise
Small businesses have long felt the strain of balancing overhead costs, particularly with rising National Insurance obligations. In response, the government has increased the Employment Allowance to £10,500. This move will help small businesses reduce their tax burden and manage operating costs more effectively, potentially enabling them to expand their workforces or invest in growth initiatives.
4. National Insurance (NI) Rate Adjustment
From April 2025, the National Insurance rate will increase from 13.8% to 15% for salaries above £5,000. This change is projected to raise an additional £25 billion annually, providing a significant boost to public finances. While this increase is expected to impact higher earners more acutely, it is part of broader efforts to ensure sustainable funding for public services.
These updates collectively aim to balance support for individuals, particularly carers and low-income workers, with measures that will increase government revenues. For jobseekers and current workers, wage increases present better prospects, while businesses, especially small enterprises, could benefit from the raised Employment Allowance to manage their financial plans amidst changing NI rates.
At RJS Resourcing, we’re committed to supporting our clients and candidates through any economic shifts with professional recruitment services. Feel free to reach out for expert advice on navigating the job market and maximising new opportunities.
Sources:
- Official UK Government Budget Report (2024)
- HMRC Announcements and Updates
- Financial analysis from key economic think tanks and industry reports