From April 2025 a number of changes will be made to the current statutory rates which will have an impact on minimum hourly rates of pay plus statutory payments including statutory maternity pay and statutory sick pay.
Whilst employees will welcome the increases as the cost of living continues to rise, employers will have increased costs to absorb in what for some are already difficult times financially.
Minimum Wage Rates
The following table sets out the changes to the National Minimum Wage and National Living Wage which will come into effect from 1 April 2025.
| Hourly rate 2024 | New hourly rate from 1 April 2025 | Increase (£) | Increase (%) | |
| National Living Wage – 21 and over | £11.44 | £12.21 | £0.77 | 6.7% |
| 18-20 year old rate | £8.60 | £10.00 | £1.40 | 16.3% |
| 16-17 year old rate | £6.40 | £7.55 | £1.15 | 18.0% |
| Apprentice Rate* | £6.40 | £7.55 | £1.15 | 18.0% |
* The Apprentice Rate applies for the first year of an apprenticeship, once the first year is completed then the minimum wage rate relevant to the apprentice’s age is applicable.
These changes will result in a pay increase for approximately 3.5 million workers and the higher percentage increases in the younger age brackets reflect the first step towards the government’s stated aim of ultimately creating a single adult pay rate.
Statutory Sick Pay (SSP)
The amount that employers need to pay in SSP to eligible employees who are absent from work due to illness is also due to increase from April 2025. The current weekly rate of SSP will rise from £116.75 to £118.75. Although this represents a relatively small increase of 1.71%, the government is currently consulting on a change that could mean that SSP becomes payable from the first day of absence due to illness. This change is part of proposals under the Employment Rights Bill 2024 and would see the existing three unpaid waiting days scrapped. If that happens then employers will face higher costs when their staff are off sick.
Other Rate Changes
In addition to these rate changes, April will also see new rates payable for a number of other statutory payments. The most common of these are the weekly rates for statutory maternity pay and statutory paternity pay, both of which will also rise by 1.71% from the current rate of £184.03 to the new rate of £187.18 per week. Furthermore, the lower earnings threshold applied in relation to these statutory rates will increase from £123 a week, to £125 a week.
Impact On Employers
The main message for employers is that the costs associated with employing staff are going up. For some employers who typically pay the minimum wage, or close to it, these changes could force them to make some drastic choices around their staffing and their services. For all employers though it is important that the impact of these changes is assessed. By planning ahead, analysing staff needs and budgets and generally being pro-active employers can approach the next 12 months prepared for the challenges associated with staff costs. That said, it is not all doom and gloom. Employees who see an increase in their wages will generally be happier and employee satisfaction tends to help with retention and job satisfaction. If any other these rates changes apply to your employees then it is good practice to confirm the changes in writing to them so that they are aware. It is vital to remember that these changes are not optional. Employers who fail to meet their legal obligations in terms of minimum and statutory payment rates can face grievances, employment tribunals and even enforcement action from HMRC.
Do you have any questions about today’s blog, need help in becoming legally compliant with contracts/policies or can we support you in taking away any people pains to give you peace of mind?
If you answered yes to any of the above, just give us a call at CUBE HR on 01282 678321, or book in a FREE 30 Minute HR Health Check here FREE HR Health Check and we’ll happily give your business a full HR overview with our personal recommendations absolutely FREE!
Why not also check out last weeks blog An Employer’s Guide to The Maternity Process
We also have a YouTube channel with loads of handy videos outlining various HR related scenarios.
