Spring Statement 2025 – What UK Employers Need to Know

As a UK employer, staying up to date with the latest government announcements is vital – especially when they directly affect your people, payroll and plans for growth.

In the Spring Statement 2025, Chancellor Rachel Reeves unveiled several key measures that will impact how businesses manage their workforce. While the broader focus was on tightening public finances, there were some big changes in employment taxes, wage rules, and recruitment opportunities.

We’ve summarised the main points that matter to you – along with practical steps to help you stay ahead.

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Spring Statement – At a Glance

• Employer National Insurance rising to 15% from April 2025
• National Living Wage increasing to £11.44/hour for age 21+
• Tighter benefit rules may bring more people into the jobs market
• £1 billion pledged for tailored employment support programmes

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Employer National Insurance Is Going Up

What’s changing? From 6 April 2025, the rate of Employer NIC will rise from 13.8% to 15%, and the threshold at which it kicks in is being reduced from £9,100 to £5,000.

What this means for you: This is a significant increase in employment costs – especially for SMEs with larger teams or those operating in labour-intensive sectors like retail, hospitality, or care.

Action: Review your staffing costs and workforce structure now. If you need support building a people plan that works within your new budget, we can help.

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National Minimum Wage Increase

What’s changing? From 1 April 2025, the National Living Wage for all workers aged 21 and over will rise to £11.44 per hour.

What this means for you: This increase ensures workers are better supported, but it does add pressure to your wage bill. Many businesses will need to update contracts and payroll systems in time.

Action: Double-check that your pay structure meets the new minimums. Let us know if you need help with employment contract updates.

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More People May Be Returning to Work

What’s changing? The government is tightening access to some welfare benefits – including Personal Independence Payments (PIP) and Universal Credit – as part of wider reforms.

What this means for you: These changes could see more people looking for work in 2025, offering businesses a wider talent pool.

Action: Now’s a great time to review your recruitment and onboarding process. A fresh look at how inclusive and accessible your hiring approach is could pay off.

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Investment in Tailored Employment Support

The government has announced £1 billion in funding for personalised employment support, along with an extra £400 million for infrastructure in the Department for Work and Pensions (DWP).

What this means for you: There may be new schemes, incentives or partnerships that employers can tap into – especially if you’re open to hiring from underrepresented groups or supporting returners to work.

Action: Keep an eye out for updates or talk to us if you’d like to explore supported recruitment schemes.

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