National Living Wage rises by 6.7%


Over three million workers will receive a pay boost after Chancellor Rachel Reeves confirmed the National Living Wage will increase from £11.44 to £12.21 an hour from April 2025.

The 6.7% increase is worth £1,400 a year for an eligible full-time worker. The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour. This £1.40 increase will mean full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year.

The government says this is the first step towards aligning the National Minimum Wage and National Living Wage to create a single adult wage rate.

The minimum hourly wage for an apprentice is also boosted next year, with an 18-year-old apprentice in an industry like construction seeing their minimum hourly pay increase by 18%, a pay rise from £6.40 to £7.55 an hour.    

Ms Reeves said:

‘This government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.’

Internet link: HMRC

New tipping law comes into force


Businesses have been banned from withholding tips or service charges from their staff under new rules that came into force on 1 October.

All tips, whether in cash or by card, must now be shared between workers by law in Britain, with millions of workers such as those working for cafes, pubs, restaurants, taxi companies and hairdressers most likely to benefit.

If an employer breaks the law and retains tips, a worker will be able to bring a claim to an employment tribunal.

The law means tips must be passed to employees by the end of the following month from when they were received.

The Department for Business and Trade has predicted the new law will mean a further £200 million will be received by workers rather than their employers.

Minister for Employment Rights Justin Madders said: 

‘When you tip someone for good service, you expect them to keep all their tip. They did the work – they deserve the reward.

‘This is just the first step of many in protecting workers and placing them at the heart of our economy. We will be introducing further measures on tipping to ensure workers get their fair share of tips.

‘Britain’s outdated employment laws require an urgent update. This Government will ensure they are fit for the modern economy and deliver on our plan to Make Work Pay.’

Internet link: GOV.UK

Make Work Pay threatens employment and growth warns FSB


The government’s Make Work Pay Bill lacks a pro-growth element and will increase economic inactivity, the Federation of Small Businesses (FSB) has warned.

The business group says that the legislation, particularly around day one dismissal rights, risks deterring small employers from taking a chance on someone who has had a significant period out of the workplace, shutting those doors and deepening social exclusion

It warns that the Bill is rushed and poorly planned while dropping 28 new measures onto small business employers all at once leaves them scrambling to make sense of it all.

There are already 65,000 fewer payroll jobs since Labour took power, and the new government is sending out a ‘troubling signal to businesses and investors’, the FSB adds.

Tina McKenzie, Policy Chair at the FSB, said:

‘The Chancellor has the opportunity to lead the way in adding a pro-business, pro-employment element to Make Work Pay in her upcoming Budget. This should include a rise in the Employment Allowance, pegging it to future rises in the National Living Wage. It should also include the reintroduction of the small business rebate for Statutory Sick Pay.

‘Sufficient time should be taken to avoid this becoming a hastily cobbled-together Act of Parliament. We look forward to more engagement and the start of a full consultation on each individual measure to ensure the voice of small employers is heard.’

Internet links: FSB

New Growth and Skills Levy must end ‘cycle of failure’


The new Growth and Skills Levy must end the ‘cycle of policy failure’ in addressing Britain’s chronic skills shortages, according to the Resolution Foundation.

The think tank says the government must get its design and implementation right if it’s to boost the number of apprenticeships after years of decline and ensure that Levy funds go to young people who need it most.

The Foundation says that Britain’s chronic skills shortages are underlined by the fact that the share of job vacancies caused by firms finding it hard to recruit people with the right skills or qualifications has more than doubled over the past decade from 16% in 2011 to 36% in 2022.

Skills shortages aren’t just preventing firms from recruiting either: an increasing share of workers are judged by their current employers to not have the right level of skills required to do their job.

Louise Murphy, Senior Economist at the Resolution Foundation, said:

‘For too long, well-intentioned reforms have failed to end the cycle of failure when it comes to addressing chronic staff shortages across Britain.

‘One-in-three vacancies today stem from firms not being able to find people with the right skills, while too many young people struggle to find a route into skilled work that doesn’t involve university.

‘The new Growth and Skills Levy offers a fresh chance to break this cycle. But the government must get the detail right if it’s to avoid repeating the same policy mistakes.’

Internet links: Resolution Foundation

10,000 boost State Pension with online payments


More than 10,000 payments worth £12.5 million have been made through a new digital service to boost people’s state pension, HMRC has revealed.

People have until 5 April 2025 to maximise their state pension by making voluntary National Insurance contributions (NICs) to fill any gaps in their NICs record between 6 April 2006 and 5 April 2018.

The service enables people to check if they have gaps in their NICs record, calculate if making a payment would increase their state pension, and then make a payment if they wish to do so.

HMRC data shows:

  • 51% of taxpayers topped up one year of their NICs record
  • the average online payment is £1,193
  • the largest weekly State Pension increase is £107.44.

After the 5 April 2025 deadline, people will only be able to make voluntary contributions for the previous six tax years, in line with normal time limits.

Emma Reynolds, Minister for Pensions, said:

‘We want pensioners of today and tomorrow to enjoy the dignity and support they deserve in retirement. That’s why I urge everyone to check if they could benefit by filling gaps before the deadline passes. Using our online tool means only a few clicks could make a huge difference to your future.’

Check your pension here.

Internet link: GOV.UK

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