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Recruitment roundup #1

Recruitment roundup 

In today’s blog, we will be providing a recap of last week’s news related to the recruitment world. We stay informed on industry news and trends with our updates providing an insight as we delve deeper. 

The two main talking points we will be covering from last week:

  • National Minimum Wage boosted by biggest cash increase in over a decade
  • How will the National insurance changes affect you? 

National Minimum Wage boosted by biggest cash increase in over a decade

Last week the Autumn statement revealed the government changes to the statutory National Minimum Wage (also known as the National Living Wage) for those aged 21 or over. The National Living Wage will rise to £11.44 per hour in April 2024, which is positive news for low-paid workers. However, some have opposing views on the topic.

The Association of Convenience Stores (ACS) has expressed concerns about the affordability of the increase, advocating for a pause in future raises if they are found to negatively impact investment and employment prospects. ACS chief executive James Lowman said: “A National Living Wage of £11.44 from April could raise concerns. A tough challenge for many local shops to afford, having struggled with a cost of doing business crisis for around two years now, and with wage bills the biggest expense for most retailers.”

Of course, this will affect various businesses which will have to adapt once again to the government’s confirmed changes. Businesses are unlikely to have anticipated such an increase and will need to reassess their budgets for the upcoming year, taking into account additional costs like employer national insurance and pensions. This will particularly affect businesses in the retail and hospitality sectors, known for employing a younger and lower-paid workforce.

Anna Vishnyakov, Workforce Partner at PwC addresses the importance for businesses to assess compliance with the National Minimum wage following the recent announcement, ‘They need to consider their compliance with the National Living Wage, as not all pay counts for the purpose of calculating whether compliance with the National Living Wage has been met and certain deductions reduce pay for National Living Wage purposes.”

Chancellor Jeremy Hunt said: “There will be a pay rise of over £1,800 a year for all full-time workers. That will end low pay in this country, delivering on our manifesto promise.” Their main priority is making sure that ‘work always pays’ and pays well. 


Current minimum wage rates:

 

Apprentice Rate

National Minimum Wage

National Minimum Wage

National Minimum Wage

National Living Wage

 

Apprentice

Under 18

18 to 20

21 to 22

23 and over

April 2022 to March 2023

£4.81

£4.81

£6.83

£9.18

£9.50

April 2023 to March 2024

£5.28

£5.28

£7.49

£10.18

£10.42

April 2024 to March 2025

£6.40

£6.40

£8.60

£11.44

£11.44

So, to sum up, the National Living Wage bump to £11.44 is a good move for workers' pay. But, it's hitting smaller businesses hard with higher wage costs. This shows the need for smart workforce management and a government review to balance worker benefits and smaller businesses staying afloat. 

It's a tricky situation that calls for a balanced approach to tackle this big wage change.

For more information regarding the National Living Wage, click here to check our latest blog.

How will the National insurance changes affect you?

Also in the Autumn statement, Jeremy Hunt declared that those who have stopped looking for work will have their payments stopped after six months. 

National insurance will be cut by two percentage points in a boost for 27 million workers. The chancellor says that this 2p decrease will save the average earner on £35,000 more than £450 next year.

When delivering the autumn statement Hunt said: "If we want people to get up early in the morning, if we want people to work nights, if we want an economy where people go the extra mile and work hard then we need to recognise that their hard work benefits all of us."

Now, the impact of changes to national insurance announced in the statement will depend on whether or not you are self-employed, and how much you earn. Employees will pay a 10% rate of national insurance on earnings between £12,570 to £50,270 a year from 6 January, down from 12%. This will save the average employee £450 a year, according to the Treasury. Those self-employed will have to wait a little longer but might be able to save more.

How can I plan my budget better against these NI changes?

To adjust to changes in your National Insurance contributions, consider taking these positive steps in managing your budget:

Adopt the practical 50/30/20 budgeting rule:

Allocate 50% to essentials like rent, mortgage, bills, and food.

Dedicate 30% to non-essential spending or wants.

Reserve 20% for debt repayment and/or savings.

Consider these spending priorities:

Eliminate high-interest 'toxic debt' like payday loans or credit cards.

Establish an emergency fund for unforeseen expenses.

Contribute to your workplace pension scheme.

Keep adding to your emergency fund.

Gradually clear any remaining debts.

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