The Autumn Budget on 26 November 2025 has been long awaited. We summarise below the key points that will impact employers.
National Minimum Wages
Prior to the Budget, the Government announced increases to National Minimum Wages, which will apply from 1 April 2026. The hourly rates will increase as follows:
- Workers aged 21 or over (National Living Wage): from £12.21 to £12.71
- Workers aged 18 to 20: from £10.00 to £10.85
- Workers aged 16-17 (and apprentices): from £7.55 to £8.00
By way of reminder, the Government has committed to working towards reducing the National Living Wage age threshold from 21 to 18.
Employment Taxes
Despite earlier rumours of the Government potentially raising income tax, National Insurance Contributions (‘NICs’), or Value Added Tax rates the Government has decided not to increase these headline rates. But, some headline changes relevant to employers are being made:
- The Government announced that for personal taxes it will maintain the freeze to income tax thresholds and the equivalent NICs thresholds for employees and self-employed individuals at their current levels for a further three years from April 2028 to April 2031. The Government will also maintain the current NICs secondary threshold for employer contributions from April 2028 to April 2031.
- From April 2029, only the first £2,000 of pension contributions made by an employee each year through a salary sacrifice scheme will be exempt from NICs, where currently there is not a cap. Employer and employee NICs (but not income tax) will be charged in the usual way on salary sacrificed pension contributions above the £2,000 annual cap.
The above changes will require primary and secondary legislation to be introduced as applicable.
Other Announcements
The Government announced that it will provide a £1.5 billion investment over the next three years in employment and skills support. This includes providing £820 million worth of investment to fund a new Youth Guarantee (read our article here for more) and £725 million for the Growth and Skills Levy to help support apprenticeships for young people, including a change to fully fund SME apprenticeships for eligible people under 25. The Budget document states that further details on these will be announced shortly.
For more information on the Budget, see Government announcement, webpage and the full Budget which provides more detail.
