Businesses warn of further job cuts without Budget relief as impact of National Insurance hikes linger
Two-thirds (66%) of UK business owners surveyed for a new report have reduced staff or are planning to do so in response to increased employer National Insurance Contributions (NIC) announced in last October’s Budget – an announcement that’s now approaching its first anniversary.
The UK-wide survey for professional services group S&W – which polled 500 business owners with turnovers of £5m upwards – reveals that:
- 19% surveyed have already reduced headcounts due to the employer NIC increase announced in the October 2024 Budget
- 28% plan further cuts unless the chancellor announces relief measures in the Autumn 2025 Budget to address the rising cost of employment
- 19% say they will reduce staff even if measures are introduced
Additionally, 43% of business owners surveyed say they would reduce staff headcounts if employer NICs were increased further.
Claire Burden, head of consulting at S&W, commented: “Businesses face considerable challenges in the current economic climate, and many owners are having to make difficult decisions to stay afloat. With salaries representing a sizeable proportion of cost bases, it is no surprise that businesses are considering drastic action in response to the increased National Insurance costs.
“This is a crunch point for UK businesses. Without meaningful action in the Autumn Budget, we risk seeing a further wave of job losses, scaled back investment, and roles moving overseas.”
Alex Simpson, partner in the Employer Solutions team at S&W, commented: “Employers are under real pressure to rethink their employment strategies. We’ve already seen among UK businesses falls in graduate recruitment levels (the potential business leaders of tomorrow), and many organisations are considering the feasibility of offshoring services, while others are becoming reliant on temporary ‘off payroll’ workers, which requires careful navigation of the employment status considerations.”
The findings will be included as part of the latest edition of S&W’s The BOSS (Business Owners Sentiment Survey) report, due to be released next week.