The Chancellor has confirmed that the minimum wage for over 21s will increase from April 2025 by 6.7%, from £11.44 to £12.21. This will mean £1,400 over a year. For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10 – up more than 16% and worth £2,500 per annum. Apprentices will get an 18% pay bump, from £6.40 to £7.55 an hour.
Chancellor Rachel Reeves said the boost would benefit more than 3m workers. She claimed it is a “significant step” towards delivering a “genuine living wage” for all employees. The move was not, however, welcomed by business leaders. John Foster, of the CBI, said that “with productivity stagnant, businesses will have to accommodate this increase against a challenging economic backdrop and growing pressure on their bottom line.” Kate Nicholls, chief executive of trade body UKHospitality, said the pay increases could add £1.9bn to the sector’s wage bill and prove “simply unsustainable” if taxes are going to shoot up at the same time.”
BFS Comment:
Whilst no-one doubts that low-paid workers deserve a ‘Liveable’ wage, this is yet another drain on the profitability and in some cases the viability, of many Startups & SMEs in general .With the increase to Employers NI contributions and the recent announcement of changes to employee benefits from Day1, that is an awful lot of extra burden to slap on small businesses all in one go!
If you think that this will adversely affect your business call us on 01327 349779 or complete the enquiry form on our web site www.bufinserv.co.uk and request a Free Consultation on options that may be available to you.
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