Upcoming UK Employment Changes: What to Expect in April 2025

As we step into the new financial year, businesses across the UK must prepare for the latest employment changes coming into effect in 2025. Understanding these updates is essential for businesses to stay compliant. Here’s what you need to know:

Key Changes Taking Effect in April 2025

1. National Minimum and Living Wage Increases

From 1st April 2025, the UK government introduced updated minimum wage rates:

• 21 and over (National Living Wage): Increased to £12.21 per hour

• Ages 18–20: Increased to £10.00 per hour

• Under 18: Increased to £7.55 per hour

These increases aim to improve earnings for lower-paid workers while ensuring businesses remain competitive in attracting talent.

2. New Statutory Neonatal Leave and Pay

Effective 6th April 2025, under the Neonatal Care (Leave and Pay) Act 2023 and related regulations, employees with babies who are admitted to hospital for neonatal care before they are 28 days old will be entitled to statutory neonatal leave. This provides additional support for parents navigating challenging circumstances.

3. Changes to Employers’ National Insurance Contributions

Employers must also prepare for an increase in National Insurance contributions, which could impact payroll costs. From 6th April 2025, employer’s NICs will increase from 13.8% to 15%. The level in which employers start paying NICs will also reduce from £9,100 to £5,000 per year.

However, the employment allowance will increase from £5,000 to £10,500.

Businesses should review their financial plans to manage this adjustment effectively.

Preparing for the Changes

With these updates taking effect, businesses should take proactive steps to ensure they are ready:

• Update payroll systems to reflect the new wage rates and National Insurance adjustments.

• Review policies and communicate updates to employees, particularly regarding wage increases and leave entitlements.

• Seek expert advice to navigate these changes effectively.

How We Can Help

At Dodds Consultancy Group, we specialise in supporting SMEs with HR guidance, payroll management, and recruitment strategies. Our expert team can help your business adapt to these changes, ensuring a seamless transition.

If you need assistance preparing for these changes, contact us today to discuss how we can support your business.