Autumn Budget 2021: What it means for UK businesses

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The 2021 Autumn Budget has finally been revealed.

 

  • UK’s minimum and living wages to increase
  • Apprenticeship wages to rise by 51p per hour
  • End of the public sector pay freeze
  • £3bn in funding to drive a “skills revolution”
  • Claims of a greener economy to deliver 440,00 jobs

 

Following 2021’s Spring Budget announcement, Chancellor Rishi Sunak outlined the government’s next steps for the UK’s economic recovery from Covid-19 in 2021’s Autumn Budget. This includes increases in minimum pay rates across multiple age groups, as well as new funding, initiatives and business rate reductions to support struggling sectors bounce back from setbacks caused by the pandemic.

 

Here are all the announcements and changes you need to know:

 

Changes to national minimum pay rates

 

National Living Wage increase


Increasing the support for getting workers into well-paid jobs, the Chancellor announced that the National Living Wage will rise by 6.6% from the £8.91 per hour announced in April 2021 to a new rate of £9.50, beginning in April 2022.

 

Equating to an extra £1,000 a year for full-time workers, this new National Living Wage will apply to all workers aged 23 and above..

 

National Minimum Wage increase


Pay for workers under the age of 23 will be increasing, too, with the following age groups seeing a National Minimum wage rise of 50p or more per hour from April 2022 onwards:

 

  • 21 to 22-year-olds: rising from £8.36 to £9.18 per hour
  • 18 to 20-year-olds: rising from £6.56 to £6.83 per hour
  • Under-18s: rising from £4.62 to £4.81 per hour

 

The National Minimum Wage for apprentices will also be increased from 2022, with the hourly rate for apprenticeship placements moving from £4.30 to £4.81 per hour, an increase of nearly 12%.

 

End to the pay freeze for public sector jobs


People in public sector roles – such as teachers, nurses and police officers – will be able to receive pay rises again. From April 2022, the 12-month pay freeze on public sector workers initiated by the government will end, meaning that over five million public sector workers could potentially receive a pay rise next year. However, pay rises are not guaranteed by the government as any salary increases in the public sector will be up to independent bodies.

 

During the Autumn Budget announcement, the government said public sector workers should be “seeing pay rises over the next three years as the recovery in the economy and labour market allows a return to a normal pay setting process.”

 

Business rate relief

 

The retail, hospitality, and leisure industries all received a boost, with the Chancellor revealing they will receive a 50% discount on business rates for one year. As a result businesses such as pubs, music venues, hotels, gyms and more will be allowed to claim up to £110,000 in rates relief.

 

£3bn fund for a ‘skills revolution’

 

To support its efforts in building a ‘high-wage economy’, the government will be dedicating more resources towards education and training opportunities to build a national workforce of sustainable skills, all expanding upon the previously announced ‘Plan for Jobs’. This announcement includes a £560m investment towards free maths coaching for half a million adults in a new scheme called ‘Multiply’.

 

£1.6bn boost to get 100,000 more students on to T Level industry placements


Over the next three years, the government will be investing a further £1.6 billion towards expanding the T Level scheme for 16-to-19 year olds. Announced in 2020 and piloted in the 2020/2021 academic year, T Level industry placements offer students an 80:20 mix of classroom studying and on-the-job training, with each T Level equivalent to three A Level qualifications.

 

With 2,000 students currently taking T Level programmes, the government now has its eyes on getting 100,000 more students involved, with the £1.6 billion announced in the Autumn Budget set to fund the extra classroom hours for more students.

 

An ‘infrastructure revolution’

 

Announcements of big investments in infrastructure across the UK were made by Rishi Sunak, with promises of improvements to local roads that could result in more jobs across construction, transport and engineering.

 

The Prime Minister also claimed that investment into a greener economy for the country will deliver 440,00 jobs, accompanying a claim by the Chancellor that unemployment will peak at a rate of 5.2% – better than previously expected.

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