UK Autumn Budget: National Insurance changes
Raising the impact on members.
Last week the new UK Government outlined their first budget, including a range of measures that will impact on housing associations and their staff. We know that members are already considering impacts on rents, staff cost of living increases and indeed the ability to hire new staff – notably around the increase in costs associated with changes to National Insurance (NI).
To recap, employer’s NI contributions are set to increase by 1.2 percentage points to 15% and this will take effect from April 2025. Alongside this, the secondary threshold at which employers must pay NI contributions is set to fall from £9,100 a year to £5,000. To counterbalance some of the impact on smaller employers, Employment Allowance (which allows eligible employers to reduce their annual NI liability), will increase from £5,000 to £10,500.
According to the Institute for Fiscal Studies’ analysis, this will mean contributions on a median earner’s income (£33,000) will rise by around £900.
As a first step in raising the impact of these changes on members, we’re in discussions with our sister federations as well as the Scottish Housing Regulator. We have secured a meeting with Kirsty McNeill MP, the Minister with portfolio for housing within the Scotland Office at Westminster and will be raising this with her directly. To ensure that this is further raised in any inter-governmental discussions, this week we have written to the First Minister as part of setting out what we’d like to see in the upcoming Scottish Budget.