With April 2025 on the horizon, whilst we are waiting for final confirmation on some statutory increases the new National Living Wage (NLW) and Minimum Wage (NMW) rates are confirmed. But one thing’s for sure: it’s never too early to start planning.
From 1 April 2025, the new rates NLW & NMW must be applied to all eligible employees and workers. Keep in mind that if someone moves up an age bracket in the middle of the year, you’ll need to adjust their pay rate from their birthday onwards.
How These Increases Affect Your Costs
• Wages: The mandatory hike in NLW/NMW will directly raise employment costs.
• National Insurance: Higher wages also mean an increase in NI contributions.
• Pension Contributions: Any pay rise brings a corresponding rise in pension contributions—another cost to factor into your budget.
Of course, it’s not just about the people on NLW/NMW. If you have employees who already earn above these thresholds, their pay differentials might be eroded by the statutory increases; you may want to consider whether you’ll adjust their pay as well.
Looking at the Bigger Picture: Total Reward
Given the escalating costs, it might be wise to approach reward packages more holistically. Consider employee benefits that can ease financial burdens and boost morale, such as:
• Shopping vouchers are, according to recent research the most highly valued benefit
• Healthcare Cash Plans for optical and dental support
• Corporate Leisure Memberships for fitness and well-being
o Be aware that the above may be taxable benefits and submit to P11d reporting
• Additional Holiday Allowances—often highly prized by employees
• Reciprocal Employee Discounts with local businesses
It’s also important to recognise your team’s efforts regularly. A simple, and specific, “thank you” foe something well done, can go a long way toward building loyalty and positivity in the workplace. If you’re a Breathe user, check out Kudos, a fantastic tool for celebrating achievements—big or small.
What’s Next?
As soon as we receive final confirmation on the outstanding statutory rates, we’ll send another update. In the meantime, if you need tailored advice on handling these upcoming changes—or want to chat about your broader HR strategy—just get in touch. We’re here to help you navigate the challenges and opportunities ahead.
Holly Mapstone is an HR expert and specialises in helping those of you in the SME sector with all of your HR needs.
Consultancy allows Holly to be agile and to adapt her style and support to suit the needs of her clients. Building strong working relationships allows Holly to deliver improvements, while also aligning people strategy to business outcomes and promoting resilient and positive cultures.
Need Advice?
If you need a hand with any of this, or anything else when it comes to the people and practices in your business, we’d love to help. We are always happy to debate the pros/cons, dos/don’ts with you so please do talk to us if we can help in any way, we are here to support you. Just give us a call and arrange a free consultation. You can talk to Alison directly on 07967 221595 or email info@enlightenhr.com
