From April 1, 2025, the UK’s National Minimum Wage (NMW) and National Living Wage (NLW) will increase, alongside National Insurance (NI) contributions. Employers need to budget for these changes, and employees should check their payslips to ensure they’re being paid correctly.
New Wage Rates:
- Ages 21 and over: £12.21 per hour (up from £11.44)
- Ages 18 to 20: £10.00 per hour (up from £8.60)
- Ages 16 to 17 & apprentices: £7.55 per hour (up from £6.40)
To learn more about the new wage rates, visit gov.uk
What This Means for Employers
By now, you should be aware of these changes and already making plans to stay compliant and retain your employees. If not, it's time to act fast and get up to speed.
Big UK retailers like John Lewis and Currys have already announced wage increases. John Lewis will increase its’ base pay to £12.40 per hour outside London and £13.85 within London, while M&S is giving its store workers a 5% pay rise. These increases aim to help workers keep up with the cost of living.
However, we know that increasing payroll costs places significantly more pressure on SME’s, especially when every penny is needed to invest in growth. With both wages and NI increasing, businesses will see higher payroll costs. To ensure you are prepared, here are some things to consider: Review your budgets.
Look at your expenses and identify where savings can be made. Do you have any unnecessary expense that you can cut?
- Improve your systems and be efficient.
Are there tasks that could be streamlined or automated? This doesn’t have to mean losing staff in lieu of automation, just about making the staff you do have more efficient and working “smarter not harder”
- Train your staff.
- Adjust your pricing.
Get Employees Involved in Cost-Saving
Your employees can be a valuable part of your cost-saving strategy.
- Encourage them to suggest efficiency improvements. Your employees often have great ideas on how to work smarter and more effectively.
- Educate them to reduce waste. Whether it’s saving energy, reducing material waste, or improving processes, small changes can add up to big savings.
- Motivate them to support business growth. Engaging your team in finding ways to increase sales or improve service can help cover rising costs.
Whether you run a business or work for one, staying informed on these changes and being prepared will make the transition much smoother. If you need support in managing and implementing these changes, contact us at Dakota Blue Consulting.