Yesterday, the Department for Work and Pensions (DWP) confirmed that the earnings threshold for automatic enrolment for workplace pensions will remain frozen at £10,000.
Given that National Minimum Wage for younger workers increases dramatically in April by 12.4% to 14.8% for 18 to 22 years and for 23yrs+ at 9.78%, meaning even more younger workers and part-timers will become eligible for automatic enrolment.
In addition, 18 year olds now have automatic access to workplace pensions following a change in the law last year.
Great news for workers but even more strain on employers with minimum 9.78% pay rises this year on top of similar rises last year, meaning the National Living wage has gone up £1.94 per hour in just 2 years.
Nearly £2 an hour increases per employee (and associated Employers NIC) plus additional employer pension costs whilst in an economic slowdown as well as corporation tax increases from 19% to 25% is strangling UK businesses.
In addition to the pains above for all businesses, owner manager businesses are suffering even further with the 1% increase for the NHS levy on dividend taxation (to pay for increased NHS funding) when employees and self employed had their 1% NHS levy on MIC removed and then main NIC rates were reduced in January and April 2024, respectively. This is hard on business owners whilst everybody else seems to be getting help.